RULE PROPOSALS
VOLUME 42, ISSUE 22
ISSUE DATE: NOVEMBER 15, 2010
Law and Public Safety
Division of Consumer Affairs
NEW JERSEY STATE BOARD OF ACCOUNTANCY

Proposed Readoption with Amendments: N.J.A.C. 13:29
Proposed New Rules: N.J.A.C. 13:29-4
Proposed Repeals: N.J.A.C. 13:29-1A.5 and 1A.6

New Jersey State Board of Accountancy Rules

Authorized By: William Mandeville, Executive Director, New Jersey State Board of Accountancy.
Authority: N.J.S.A. 45:1-15.1, 45:2B-48, 45:2B-68 and 45:2B-73.

Calendar Reference: See Summary below for explanation of exception to calendar requirement.
Proposal Number: PRN 2010-281 .

Submit comments by January 14, 2011 to:

William Mandeville, Executive Director
New Jersey State Board of Accountancy
PO Box 45000
Newark , NJ 07101

The agency proposal follows:

Summary

The New Jersey State Board of Accountancy (the Board) is proposing to readopt N.J.A.C. 13:29 with amendments and new rules. These rules are scheduled to expire on October 27, 2010, pursuant to Executive Order No. 66 (1978) and N.J.S.A. 52:14B-5.1. Because this notice of rules proposed for readoption has been filed prior to October 27, 2010, the expiration date of the rules in Chapter 29 is extended by 180 days, to April 25, 2011, pursuant to N.J.S.A. 52:14B-5.1c.

In compliance with Executive Order No. 66 (1978), and in light of Executive Order No. 2 (2010), the Board undertook a thorough review of the rules in N.J.A.C. 13:29 in order to clarify existing provisions, and to delete or amend rules that are unnecessary or inconsistent with the Common Sense Principles enumerated in Executive Order No. 2 (2010). The Board believes that the rules proposed for readoption, as amended, [page=2721] are necessary, reasonable, understandable and responsive to the purposes for which they were promulgated.

The following is a summary of the existing rules of Chapter 29 that the Board proposes to readopt with amendments, as well as a summary of proposed new rules.

Subchapter 1 sets forth general rules. The Board is proposing that the rules in Subchapter 1 be readopted without change. N.J.A.C. 13:29-1.1 and 1.2 establish the official name of the Board and its meeting dates, respectively. N.J.A.C. 13:29-1.3 requires a licensee to notify the Board when a change in address occurs. N.J.A.C. 13:29-1.4 requires applicants to comply with Board rules. N.J.A.C. 13:29-1.5 sets forth the fees charged by the Board. N.J.A.C. 13:29-1.6 requires a licensee to notify the Board of any criminal conviction. N.J.A.C. 13:29-1.7 through 1.14 are reserved.

The rules in Subchapter 1A establish requirements for taking the Uniform Certified Public Accountant Examination (CPA examination) and for obtaining a license as a Certified Public Accountant. N.J.A.C. 13:29-1A.1 concerns applicant qualifications. The Board is proposing to amend N.J.A.C. 13:29-1A.1(a), which currently requires applications to be filed on Board-provided forms by the date specified in the application, to reflect internal changes in the application process utilized by the Board. The proposed amendments provide that applications must be made on forms approved by the Board. These forms must be filed with the Board or its designee. Reference to the application due date is proposed to be deleted because this date no longer appears on the application form. N.J.A.C. 13:29-1A.2, which sets forth examination requirements, is proposed to be readopted without change.

N.J.A.C. 13:29-1A.3 establishes education and experience requirements for applicants to take the CPA examination. N.J.A.C. 13:29-1A.3(b)1 currently provides that until July 1, 2000, an applicant must have completed 120 semester hours of education. Paragraph (b)2 provides that after July 1, 2000, an applicant must have completed 150 semester hours. N.J.S.A. 45:2B-49 of the Accountancy Act of 1997 (the Act) was amended, pursuant to P.L. 2005, c. 104, however, to eliminate the deadline by which applicants with 120 semester hours of education could sit for the examination. Applicants with 120 semester hours of education are now permitted to sit for the examination at any time. The Act, however, provides that these applicants may not be licensed until they have obtained an additional 30 hours of education. This requirement is currently reflected in N.J.A.C. 13:29-1A.3(c). The Board is proposing to delete the references to the "July 1, 2000" date in paragraphs (b)1 and 2 as these dates no longer reflect the statutory requirement in N.J.S.A. 45:2C-49. The Board is also proposing clarifying amendments to N.J.A.C. 13:29-1A.3(c) in order to make the section easier to follow.

The Board is also proposing amendments to N.J.A.C. 13:29-1A.3(e), which concerns the one year of intensive and diversified experience in the practice of public accounting that applicants must obtain in order to qualify for licensure. Currently, such experience must be obtained under the supervision of a Board licensee. The Board is proposing to amend this provision to also permit applicants to obtain this experience under the supervision of an individual licensed in another state who is permitted to practice in New Jersey under proposed new rule N.J.A.C. 13:29-4.1. The proposed new rule, which is discussed in detail below, reflects recent amendments to the Act in P.L. 2008, c. 45, which became effective on July 15, 2009. P.L. 2008, c. 45 permits individuals who satisfy certain conditions to engage in the practice of public accountancy in New Jersey without having to notify the Board or to obtain a license. In light of these statutory amendments, the Board believes that permitting applicants to obtain their required experience under the supervision of such persons is reasonable. Moreover, the proposed amendments will provide applicants increased flexibility to meet this licensure requirement. The Board is also proposing an additional, clarifying amendment to subsection (e), concerning the amount of experience applicants must possess. Currently, the rule provides that the one year of experience must be obtained in full-time regular employment based on a minimum of 35 hours per week. The proposed amendments clarify that applicants must complete a minimum of 1,750 hours over the one-year period. The 1,750 hours is based on 35 hours of work per week over a 50-week work period.

The Board is proposing to delete subsections (f) and (g) because the provisions are no longer operative. Subsections (f) and (g) permitted applicants to submit, in lieu of the one year of experience working under the supervision of a Board licensee, evidence that they had four years of experience working in government, industry or education without supervision. This experience, obtained prior to April 6, 1998, was accepted by the Board until April 6, 2004. If it was obtained after April 6, 1998, it was acceptable until April 6, 2002. Existing subsection (h) is proposed to be recodified as subsection (f) without change.

The Board is proposing to readopt without change N.J.A.C. 13:29-1A.4, which establishes requirements for obtaining examination credit. N.J.A.C. 13:29-1A.5 establishes a transition period for applicants who earned conditional credit on the paper-and-pencil CPA examination before the computer-based CPA examination was introduced in November 2003. N.J.A.C. 13:29-1A.6 establishes standards for the calculation of conditional credit earned on the paper-and-pencil examination on or before November 2003. The Board is proposing to repeal N.J.A.C. 13:29-1A.5 and 1A.6 because the transition periods established under the rules have expired. Under N.J.A.C. 13:29-1A.5, applicants who had obtained conditional credit on a section of the paper-and-pencil examination were given a discrete transition period during which they were required to pass all remaining sections of the examination. The last transition period provided for under the rule expired on April 30, 2009. N.J.A.C. 13:29-1A.6 expressly provides that the rule expires on April 30, 2009, coinciding with the end of the last transition period.

N.J.A.C. 13:29-1A.7 concerns examination security and cheating. The Board is proposing to amend subsection (c) to expand the list of prohibited activities that, if engaged in, will constitute cheating. Applicants are prohibited from collecting test items for use, redistribution or sale, and from referring to crib sheets, textbooks or other materials, including electronic media, while the examination is in progress.

N.J.A.C. 13:29-1A.8 establishes requirements for individuals licensed in other states who are applying for licensure in New Jersey without examination. Subsection (c) provides that in order to qualify for licensure without examination such applicants must satisfy the education and experience requirements of N.J.A.C. 13:29-1A.3. The Board is proposing to amend subsection (c) to clarify that an applicant who passed the CPA examination and who holds a valid license issued by another jurisdiction prior to January 1, 2012 will not be required to comply with the 150-hour educational requirement in N.J.A.C. 13:29-1A.3(c). The proposed change will make the rule consistent with the statutory requirements of N.J.S.A. 45:2B-50.1, which became effective on July 15, 2009 pursuant to P.L. 2008, c. 45.

N.J.A.C. 13:29-1A.9 concerns the issuance and renewal of public school accountant licenses. The Board is proposing to amend subsection (d), which establishes requirements for reinstatement following suspension for failure to renew, and paragraph (f)4, which establishes requirements for returning to practice following the election of inactive status to provide that the applicant must present proof of holding an active New Jersey Certified Public Accountant, Public Accountant or Registered Municipal Accountant license, to make the rule consistent with N.J.S.A. 45:2B-73 of the Act. The Board is also proposing to amend subsection (e), which requires the Board to send a notice of renewal to public school accountants at least 60 days prior to the date of license expiration, to clarify the circumstances under which a licensee may be fined for continuing to practice if the Board fails to send out the renewal applications in a timely manner. The Board is proposing to further amend subsection (f) to clarify that a licensed public school accountant who elects inactive paid status is entitled to obtain all printed information disseminated by the Board to active licensees. The proposed amendments further clarify that a licensee choosing inactive unpaid status is not required to pay the inactive renewal fee. The Board is proposing similar amendments to the license renewal requirements for certified public accountants and public accountants in N.J.A.C. 13:29-1A.10(h) and (i), and for registered municipal accountants in N.J.A.C. 13:29-2.3(g) and (h).

Subchapter 2 sets forth licensing requirements for registered municipal accountants. The Board is proposing to amend the application requirements in N.J.A.C. 13:29-2.1 and the license renewal provisions in N.J.A.C. 13:29-2.3, to clarify that an applicant for this license seeking reinstatement as a result of failing to renew, or seeking to return to active [page=2722] practice following the election of inactive status, must hold an active New Jersey Certified Public Accountant or Public Accountant license, consistent with N.J.S.A. 45:2B-70 of the Act. The Board is proposing to amend N.J.A.C. 13:29-2.2, which concerns the Registered Municipal Accountant (RMA) examination, to make the CPA examination security requirements and cheating prohibitions in N.J.A.C. 13:29-1A.7 applicable to the RMA examination.

Subchapter 3 sets forth rules of professional conduct. N.J.A.C. 13:29-3.1 concerns independence, and provides that a licensee or the licensee's firm must not express an opinion on financial statements of an entity or organization in a manner that implies that the licensee is acting as an independent public accountant with respect to the entity or organization unless the licensee or the firm is, in fact, independent with respect to the entity or organization. The rule provides a list of examples in paragraphs (a)1 and 2 of when independence will be considered to be impaired. The Board believes that the examples articulated in the rule are not detailed enough to provide adequate guidance to licensees concerning conduct or activities that will be deemed to impair independence. For this reason, the Board is proposing to delete the provisions in N.J.A.C. 13:29-3.1(a)1 and 2, and is proposing a new subsection (b). The new provision requires a person engaged in the practice of public accounting to conform, in fact and appearance, to the independence standards established by the American Institute of Certified Public Accountants and the Board, and where applicable, the independence standards of the U.S. Securities and Exchange Commission (SEC), the Government Accountability Office (GAO), the Public Company Accounting Oversight Board (PCAOB), and other national or international regulatory or professional standard setting bodies. The Board notes that all the examples contained in the current rule are addressed in greater detail under the AICPA standards. The Board believes that requiring licensees to comply with these established independence standards will afford the consumers they serve added protection.

The Board is proposing to readopt without change N.J.A.C. 13:29-3.2, 3.3 and 3.4, which establish standards for integrity and objectivity, competence and the use of forecasts. The Board is proposing to amend N.J.A.C. 13:29-3.5, which currently requires licensees to comply with generally accepted auditing standards. The proposed amendments also require licensees to comply with generally accepted governmental auditing standards, if applicable to their work. In addition, the rule currently provides that Statements on Auditing Standards (SAS) issued by the AICPA are deemed interpretations of generally accepted auditing standards. The Board is proposing to amend the rule to also refer to SAS issued by the PCAOB.

N.J.A.C. 13:29-3.6 concerns accounting principles. Subsection (b) defines generally accepted accounting principles as those pronouncements issued by the Financial Accounting Standards Board (FASB) and its predecessor entities. The Board is proposing an amendment to subsection (b) to include a reference to FASB successor entities. The Board is proposing that the remaining rules in Subchapter 3, with the exception of N.J.A.C. 13:29-3.12 and 3.16, discussed below, be readopted without change. N.J.A.C. 13:29-3.7 imposes requirements for maintaining the confidentiality of client information. N.J.A.C. 13:29-3.8 concerns the permissibility of contingent fees. N.J.A.C. 13:29-3.9 is reserved. N.J.A.C. 13:29-3.10 imposes limitations on licensee advertising. N.J.A.C. 13:29-3.11 concerns client solicitations. N.J.A.C. 13:29-3.13 and 3.14 are reserved. N.J.A.C. 13:29-3.15 imposes requirements for firm names. N.J.A.C. 13:29-3.17 and 3.18 are reserved.

N.J.A.C. 13:29-3.12 concerns the permissibility of commissions, performance fees and referral fees. N.J.A.C. 13:29-3.12(f)2 currently requires that the disclosures that must be provided under the rule be signed by the person to whom the licensee makes a referral or recommendation or by the person who was referred to the licensee. The Board is proposing to amend the rule to require the disclosure to be signed and dated by both the person to whom the licensee makes the referral and the person who was referred by the licensee, in order to ensure that the consumer receives the most relevant information possible about the transaction.

N.J.A.C. 13:29-3.16 concerns the release of client records. The rule requires a licensee or the licensee's firm to provide to a client or former client any of the following documents upon request: a copy of the client's tax return; a copy of a report or other document issued by the licensee to or for the client; any records belonging to, or obtained from, or on behalf of, the client which the licensee removed from the client's premises or received for the client's account; and a copy of the licensee's or the firm's working papers, to the extent that the papers include records that would ordinarily constitute part of the client's books and records, and are not otherwise available to the client. The Board is proposing a new subsection (b),which provides that a licensee may not withhold a client's records for the non-payment of fees for the licensee's professional services.

Subchapter 4, which is currently reserved, is proposed to be added as new "Practice Privilege; Individuals and Firms without a New Jersey Office." As noted above, the Board is proposing a new rule at N.J.A.C. 13:29-4.1 to codify recent amendments to the Accountancy Act under P.L. 2008, c. 45, concerning individuals permitted to practice in New Jersey without being licensed by the Board, a practice customarily referred to in the accounting profession as exercise of the practice privilege. The Board is also proposing a new rule at N.J.A.C. 13:29-4.2 to set forth when firms that do not have offices in New Jersey must register with the Board in order to provide accounting services, consistent with the requirements of P.L. 2008, c. 45.

Under N.J.A.C. 13:29-4.1, an individual whose principal place of business is not in New Jersey will be entitled to practice as a certified public accountant in State without having to be licensed by the Board if he or she meets the requirements of the rule. Specifically, the individual must be licensed as a certified public accountant in a state whose licensing requirements the National Qualification Appraisal Service of the National Association of State Boards of Accountancy (NASBA) has verified to be in substantial equivalence with the licensing requirements of the Uniform Accountancy Act adopted by NASBA and AICPA. An individual who is licensed as a certified public accountant in a state whose licensing requirements have not been verified to be substantially equivalent may still qualify for the practice privilege. In this situation, the individual must obtain verification from the National Qualification Appraisal Service that the individual's personal certified public accountant qualifications are substantially equivalent. An individual practicing under the practice privilege must cease providing professional services in New Jersey if his or her license in the state where the individual has his or her principal place of business becomes invalid pursuant to N.J.A.C. 13:29-4.1(c).

Subsection (b) provides that an individual granted the practice privilege may perform certain attest services in New Jersey only through a firm that has registered with the Board under N.J.A.C. 13:29-4.2(a). Those attest services, set forth in N.J.A.C. 13:29-4.1(b) and 4.2(a), are: (1) a financial statement audit or other engagement to be performed in accordance with the Statements on Auditing Standards; (2) an examination of prospective financial information to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE); or (3) an engagement to be performed in accordance with PCAOB Auditing Standards. Under N.J.A.C. 13:29-4.2, a firm providing the referenced attest services for a client with a home office in New Jersey must register with the Board. Proposed new N.J.A.C. 13:29-4.3 defines "home office," for purposes of the new subchapter, as the location specified by the client as the address to which the services are directed.

A firm that is required to register must ensure that the referenced services are only performed through an individual who qualifies to exercise the practice privilege, and that each owner of the firm, other than a non-licensee, is a certified public accountant in a state or possession of the United States or the District of Columbia in good standing. In addition, there must be a certified public accountant in the firm who has ultimate responsibility for each attest engagement.

N.J.A.C. 13:29-4.2 also provides that a firm that does not have an office in New Jersey may perform compilation services or review financial statements in accordance with the Statements on Standards for Accounting and Review Services (SSARS), and may practice public accountancy for a client having its home office in New Jersey without registering with the Board if the firm meets requirements for peer review and firm ownership by non-licensed individuals. The firm may perform [page=2723] the permitted services only through an individual exercising the practice privilege.

The rules in Subchapter 5 concern the Board's Peer Review Program. The Board is proposing to readopt these rules without change. N.J.A.C. 13:29-5.1 establishes the purpose and scope of the rules the subchapter. N.J.A.C. 13:29-5.2 sets forth relevant definitions. N.J.A.C. 13:29-5.3 establishes standards for peer reviews and sponsoring organizations. N.J.A.C. 13:29-5.4 establishes requirements for enrollment and participation and provides for program exemptions. N.J.A.C. 13:29-5.5 concerns the effect of successive pass with deficiencies or fail ratings. N.J.A.C. 13:29-5.6 requires reporting to the Board. N.J.A.C. 13:29-5.7 establishes requirements for the Peer Review Oversight Committee. N.J.A.C. 13:29-5.8 sets forth sponsoring organization procedures. N.J.A.C. 13:29-5.9 concerns confidentiality.

Subchapter 6 sets forth rules for continuing professional education. The Board is proposing that all of the rules in the subchapter, with the exception of N.J.A.C. 13:29-6.2 and 6.5, be readopted without change. N.J.A.C. 13:29-6.1 sets forth the scope of the rules contained in the subchapter. N.J.A.C. 13:29-6.3 delineates permissible technical subjects for continuing education credit. N.J.A.C. 13:29-6.3A requires licensees to complete a New Jersey law and ethics course. N.J.A.C. 13:29-6.4 sets forth the non-technical subjects that licensees may take for continuing education credit. N.J.A.C. 13:29-6.6 establishes criteria for continuing education sponsors. N.J.A.C. 13:29-6.6A provides exemptions to sponsor requirements. N.J.A.C. 13:29-6.7 concerns credit-hour calculations. N.J.A.C. 13:29-6.8 requires licensees to retain continuing education records. N.J.A.C. 13:29-6.9 establishes continuing education requirements for applicants for licensure by reciprocity. N.J.A.C. 13:29-6.10 and 6.11 set forth responsibilities of program developers and sponsors. N.J.A.C. 13:29-6.12 imposes requirements for a sponsor's failure to comply with program responsibilities. N.J.A.C. 13:29-6.13 is reserved.

N.J.A.C. 13:29-6.2 provides that licensees must complete 120 hours of continuing professional education per triennial registration period. The Board is proposing an amendment to subsection (a) to provide that all licensees must complete a minimum of 20 hours of continuing professional education in each year of the triennial registration period. The Board believes that the proposed amendment is reasonable and will help ensure that licensees receive a sufficient amount of continuing education in each year of the triennial period, so that they may provide the highest quality accounting services to New Jersey consumers.

N.J.A.C. 13:29-6.5 delineates permissible sources of continuing professional education credit. N.J.A.C. 13:29-6.5(c)2 concerns credits obtained for peer-reviewed publications. The Board is proposing to delete the reference to "peer review" in paragraph (c)2 because the Board believes the reference will lead to confusion with the peer review program requirements in Subchapter 5. The proposed deletion of the phrase "peer review" will not alter the substantive requirements of the paragraph. In order to qualify for credit, the publication, which must be submitted to the Board for review, must contribute to the professional competence of accountants. In addition, the Board is proposing a minor amendment to N.J.A.C. 13:29-6.5(c)2v to delete the reference to "quality enhancement," as the Board's quality enhancement program, is no longer operational following the adoption of the peer review program requirements in Subchapter 5. As amended, N.J.A.C. 13:29-6.5(c)2v provides that continuing professional education credit will be given for each 50-minute period of technical review or peer review program committee participation.

The Board has provided a 60-day comment period for this notice of proposal; therefore, this notice is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The Board believes that the rules proposed for readoption with amendments, new rules and repeals that establish licensure standards and clarify the varied aspects of public accounting practice, will have a positive impact upon licensees, firms and applicants. The rules proposed for readoption continue accepted practice standards for licensees and firms established by the Board, and by so doing, provides them with a clear and comprehensive set of rules to guide them in their professional practice. Licensees and firms will benefit from the readoption as a result of the uniform standards that will be applied throughout the profession.

The Board also believes that the proposed readoption of these rules will have a positive impact upon the public by continuing to safeguard the public's welfare by ensuring the maintenance of professional practice standards. These practice standards enable licensees and firms to provide the highest quality accounting services to New Jersey consumers.

The Board believes that the proposed amendments to N.J.A.C. 13:29-1A.3, which will permit an applicant for licensure to obtain his or her accounting experience under the supervision of a person exercising the practice privilege in New Jersey, will have a positive impact upon applicants by providing them greater flexibility in meeting licensure requirements. The Board also believes that the proposed amendments to N.J.A.C. 13:29-1A.7, tighten security requirements for the CPA examination, will benefit applicants for licensure by clarifying the appropriateness of engaging in certain conduct during the examination. The proposed amendments to N.J.A.C. 13:29-2.2, which make the security requirements in N.J.A.C. 13:29-1A.7 applicable to persons taking the RMA examination, will similarly benefit applicants.

The proposed amendments to N.J.A.C. 13:29-1A.9, 1A.10 and 2.3 will have a positive impact upon applicants seeking to reinstate public school accountant, certified public account, public account or registered municipal account licenses, by clarifying what information must be submitted to the Board for review. In addition, the proposed amendments to these rules will also have a positive impact upon licensees who elect inactive status by clarifying the differences between the election of inactive unpaid and inactive paid status.

The Board believes that the proposed amendments to N.J.A.C. 13:29-3.1 will positively impact licensees, firms and consumers by mandating compliance with AICPA, SEC, GAO and PCAOB independence standards. Similarly, the proposed amendments to N.J.A. 13:29-3.5 will benefit licensees and firms by clarifying applicable auditing standards with which they must comply.

Proposed new rules N.J.A.C. 13:29-4 will have a positive impact upon individuals not licensed in New Jersey , and firms without a New Jersey office, that wish to provide accounting services in State. The new rules will clarify what requirements they must satisfy to exercise the practice privilege conferred under P.L. 2008, c. 45.

Proposed amendments to N.J.A.C. 13:29-6.2, which require licensees to obtain a minimum of 20 credits of continuing education in each year of the triennial period, will have a positive impact upon licensees and the consumers they serve by helping to ensure that licensees obtain the required 120 credit hours of education in a reasonable manner.

Economic Impact

The rules proposed for readoption with amendments, new rules and repeals will have an economic impact on licensees, firms and applicants.

Applicants for licensure as certified public accountants are required to pay the application fee specified in N.J.A.C. 13:29-1.5. In addition, applicants will incur costs to obtain the requisite education and experience required for licensure and must also bear the costs associated with passing the CPA examination pursuant to the requirements of N.J.A.C. 13:29-1A.1, 1A.2 and 1A.3. Applicants for licensure by waiver of examination must pay the application fee specified in N.J.A.C. 13:29-1.5 and may incur costs to submit required documentation to the Board for review under N.J.A.C. 13:29-1A.8. However, proposed amendments to N.J.A.C. 13:29-1A.8(c), which provide that an applicant seeking licensure by waiver of examination who holds a license from another jurisdiction issued prior to January 1, 2012 will not be required to comply with the 150-hour education requirement, will reduce the burden on such applicants. Such applicants will not be required to obtain an additional 30 hours of education required of applicants for licensure with examination, resulting in significant cost savings.

Applicants for licensure as public school accountants and registered municipal accountants under N.J.A.C. 13:29-1A.9 and 2.1 must submit application fees, and may also incur costs to submit required documentation to the Board for review. In addition, applicants for a registered municipal accountant license must also bear the costs associated with taking the RMA examination pursuant to N.J.A.C. 13:29-2.2.

[page=2724] Certified public accountants, public accountants, public school accountants, and registered municipal accountants must pay triennial renewal fees pursuant to N.J.A.C. 13:29-1A.9, 1A.10 and 2.3. The rules impose additional costs on those applying late, as well as those seeking reinstatement from a license suspended for failure to renew. These applicants are required to pay late and reinstatement fees. Applicants for reinstatement may also incur costs to complete required continuing education and, in the case of a license that has been suspended for more than five years, the costs associated with retaking the required licensing examination. Licensees may also incur costs incident to notifying the Board of changes in address or upon a criminal conviction pursuant to the requirements of N.J.A.C. 13:29-1.3 and 1.6.

N.J.A.C. 13:29-3.1 through 3.6 may have an economic impact upon licensees and their firms to the extent that they must provide services to clients in a manner that conforms to the standards articulated in the rules. In addition, N.J.A.C. 13:29-3.8 and 3.12 will have an economic impact upon licensees and firms as the rules prohibit a licensee or his or her firm from receiving contingency fees, commissions, performance fees or referral fees in the circumstances articulated in the rules. N.J.A.C. 13:29-3.16 requires licensees to furnish their clients with copies of records upon request, which may result in administrative costs for licensees and firms.

Individuals qualifying for the practice privilege under proposed new N.J.A.C. 13:29-4.1 will not be required to notify the Board or to pay a licensing fee, resulting in a cost savings for such individuals. A firm that does not have an office in New Jersey but wishes to provide certain attest services for a client in New Jersey will be required to register with the Board and pay a registration fee under proposed new N.J.A.C. 13:29-4.2.

N.J.A.C. 13:29-5.4, 5.5 and 5.6, which mandate participation in a peer review program and require reporting of review results to the Board, will have an economic impact upon all firms in New Jersey. Firms will incur costs to enroll in peer review programs and to submit required review documentation to the Board.

N.J.A.C. 13:29-6.2 will have an economic impact upon licensees to the extent that licensees will be required to obtain 120 hours of continuing professional education in each triennial period. The Board does not believe that the proposed amendments to the rule, which require licensees to obtain a minimum of 20 hours of continuing education in each year of the triennial period, will have an economic impact upon licensees, as the amendments do not increase the total number of credits required to be completed.

N.J.A.C. 13:29-6.6 will have an economic impact upon continuing education sponsors, to the extent that sponsors incur administrative costs in submitting applications to the Board and the application fee specified in N.J.A.C. 13:29-1.5. Sponsors may also incur administrative costs associated with maintaining attendance records and course documentation for the required five-year period. Similarly, licensees may incur administrative expenses to submit documentation verifying completion of continuing education requirements under N.J.A.C. 13:29-6.8.

The specific administrative costs that will be borne by members of the regulated community as a result of the rules proposed for readoption with amendments, new rules and repeals are difficult to ascertain, and will vary based on costs established by entities beyond the Board's authority to regulate, such as colleges and universities and examination providers. The Board, however, believes that the costs to licensees, firms and applicants, delineated above, are outweighed by the benefit to the public in protecting the public's welfare by ensuring that accounting services are provided by qualified professionals consistent with the professional practice standards established in the rules.

Federal Standards Statement

A Federal standards analysis is not required because the rules proposed for readoption with amendments, new rules and repeals are governed by N.J.S.A. 45:2B-42 et seq. and are not subject to any Federal standards or requirements. Although the rules in N.J.A.C. 13:29 are not subject to any Federal requirements or standards, where deemed appropriate, the Board has incorporated Federal standards. Specifically, the proposed amendments to N.J.A.C. 13:29-3.1 require licensees to comply with independence standards established by the U.S. Securities and Exchange Commission, the Government Accountability Office and the Public Company Accounting Oversight Board (PCAOB), as applicable. Proposed amendments to N.J.A.C. 13:29-3.5 will require licensees to comply with generally accepted governmental auditing standards, as well as Statements on Auditing Standards issued by the PCAOB. In addition, N.J.A.C. 13:29-3.8, concerning contingent fees, and N.J.A.C. 13:29-3.12, concerning commissions and performance fees, provide that any licensee who receives a contingent fee, a performance fee, or a commission must comply with all applicable Federal securities laws and regulations, as well as all applicable Federal registration requirements, including the Investment Advisors Act of 1940 (15 U.S.C. ßß80b-1 et seq.), the Uniform Securities Law (1997) and the Securities Act of 1933 (15 U.S.C. ßß77a et seq.) and the Securities Exchange Act of 1934 (15 U.S.C. ßß78a et seq.).

Jobs Impact

The Board does not anticipate that the rules proposed for readoption with amendments and repeals will result in an increase or decrease in the number of jobs in the State. However, it is possible that proposed new rules N.J.A.C. 13:29-4 may have an impact on the number of jobs available to licensed accounting professionals in New Jersey . The proposed new rules, which implement the statutory requirements of P.L. 2008, c. 45, will permit individuals not licensed in New Jersey, and accounting firms that do not have a New Jersey office, to provide accounting services to individuals and businesses in the State. To the extent that individuals and businesses in New Jersey choose to use the services of accountants and accounting firms that are not located in State, instead of retaining New Jersey licensed accountants and accounting firms, New Jersey licensees may experience a decrease in the number of opportunities available to them to provide accounting services to these clients.

Agriculture Industry Impact

The Board does not believe that the rules proposed for readoption with amendments, new rules or repeals will have any impact upon the agriculture industry in the State.

Regulatory Flexibility Analysis

Currently, the Board licenses approximately 20,000 accountants and 900 accounting firms. If Board licensees are considered "small businesses" within the meaning of the Regulatory Flexibility Act, N.J.S.A. 52:14B-16 et seq., then the following analysis applies.

The rules proposed for readoption with amendments, new rules or repeals will impose various reporting, recordkeeping and compliance requirements upon licensees. These requirements are discussed in the Summary above.

No additional professional services will be needed to comply with the rules proposed for readoption with amendments, new rules or repeals, with the exception of the peer review requirements of Subchapter 5. A licensed accounting firm that performs attest services or accounting and/or auditing engagements, as delineated in the rules, will be required to retain the professional services of a qualified sponsoring organization to conduct a peer review. The costs of compliance with the rules proposed for readoption with amendments, new rules or repeals are discussed in the Economic Impact statement above. The Board does not believe that there will be any significant, additional economic impact upon licensees as a result of the rules proposed for readoption with amendments, new rules or repeals. The Board believes that the rules proposed for readoption with amendments, new rules or repeals should be uniformly applied to all licensees in order to ensure the welfare of the general public in the provision of public accounting services. Therefore, no differing compliance requirements for any licensees are provided based upon the size of the business.

Smart Growth Impact

The Board does not believe that the rules proposed for readoption with amendments, new rules or repeals will have any impact upon the achievement of smart growth or upon the implementation of the State Development and Redevelopment Plan.

Housing Affordability Impact

The rules proposed for readoption with amendments, new rules and repeals will have an insignificant impact on affordable housing in New Jersey and there is an extreme unlikelihood that the rules would evoke a [page=2725] change in the average costs associated with housing because the rules proposed for readoption with amendments, new rules or repeals concern the practice of public accountancy.

Smart Growth Development Impact

The rules proposed for readoption with amendments, new rules and repeals will have an insignificant impact on smart growth and there is an extreme unlikelihood that the rules would evoke a change in housing production in Planning Areas 1 or 2 or within designated centers under the State Development and Redevelopment Plan in New Jersey because the rules proposed for readoption with amendments, new rules or repeals concern the practice of public accountancy.

Full text of the rules proposed for readoption may be found in the New Jersey Administrative Code at N.J.A.C. 13:29.

Full text of the rules proposed for repeal can be found in the New Jersey Administrative Code at N.J.A.C. 13:29-1A.5 and 1A.6.

Full text of the proposed amendments and new rules follows (additions indicated in boldface thus ; deletions indicated in brackets [thus]):

SUBCHAPTER 1A. EXAMINATION AND LICENSURE

13:29-1A.1 Applications for examination; applicant qualifications

(a) An applicant for licensure as a certified public accountant shall pass the computer-based Certified Public Accountant Examination, prepared by the Board of Examiners of the American Institute of Certified Public Accountants. Applications to take the Certified Public Accountant Examination shall be made on a form [provided] approved by the Board and shall be filed with the Board [by the due date specified by the Board in the application form] or its designee .

(b)-(f) (No change.)

13:29-1A.3 Applications for examination; education and experience requirements

(a) (No change.)

(b) [Except as provided in (c) below, an] An applicant to take the Certified Public Accountant Examination shall satisfy the following educational requirements [in order to qualify for licensure]:

1. [Until July 1, 2000, an] An applicant shall possess a baccalaureate degree, or its equivalent, based upon a curriculum that includes a minimum of 60 semester hours selected from courses in English, history, foreign languages, mathematics, general psychology, philosophy, biological sciences, physical sciences, economics, sociology, religion, government, political science, geography, fine arts and music; and a minimum of 60 semester hours in professional courses including: at least 24 semester hours in accounting including municipal and government accounting; at least six semester hours in business law; at least six semester hours in finance; at least six semester hours in economics; and at least 18 semester hours in related business subjects; or

2. [After July 1, 2000, an] An applicant [to take the Certified Public Accountant Examination] shall have completed at least 150 hours of education, including a baccalaureate or higher degree. An applicant shall be deemed to have satisfied the educational requirement if, as part of the 150 [semester hours] semester-hours of education, the applicant has satisfied any one of the following four conditions:

i.-iv. (No change.)

(c) [Notwithstanding the provisions of (b)2 above, an applicant shall qualify for examination if the applicant has a baccalaureate degree or its equivalent from an institution of higher education accredited by a regional accrediting agency recognized by the Commission on Higher Education. Such applicant, however,] An applicant qualifying to take the Certified Public Accountant Examination pursuant to the provisions of (b)1 above shall not be issued a license until successful completion of at least 150 [semester hours] semester-hours of education, as set forth in (b)2 above. The 150 [semester hours] semester-hours of education requirement shall not apply to an applicant who obtained a baccalaureate degree or its equivalent prior to July 1, 2000 and was qualified for licensure prior to such date[, as set forth in (b)1 above].

(d) (No change.)

(e) An applicant who has passed all parts of the Certified Public Accountant Examination shall furnish evidence of one year of intensive and diversified experience in the practice of public accounting or its equivalent under the supervision of a Board licensee or an individual who is entitled to practice as a certified public accountant in this State as provided in N.J.A.C. 13:29-4 . Experience shall be obtained in full-time regular employment based on a minimum of [35] 1,750 hours per [week] year . [Part time] Part-time experience shall be considered equivalent if acquired within two consecutive years and in no less than the same amount of hours required for [full time] full-time experience. Experience shall be considered intensive and diversified if experience is acquired in the areas of auditing or accounting. Such evidence shall take the form of a notarized affidavit on the employer's letterhead indicating in detail the nature of the intensive and diversified experience in auditing or accounting.

[(f) In lieu of the experience required in (e) above, the Board shall accept four or more years of experience obtained by an applicant, prior to April 6, 1998, working in government, industry or education without the supervision of a licensed public accountant or a certified public accountant. The Board shall accept such experience until April 6, 2004.

(g) In lieu of the experience required in (e) above, the Board shall accept four or more years of experience obtained by an applicant, on or after April 6, 1998, working in government, industry or education without the supervision of a licensed public accountant or a certified public accountant. The Board shall accept such experience until April 6, 2002.]

[(h)] (f) (No change in text.)

13:29-1A.5 (Reserved)

13:29-1A.6 (Reserved)

13:29-1A.7 Security and irregularities; cheating

(a)-(b) (No change.)

(c) For purposes of this section, the following actions or attempted activities, among others, may be considered cheating:

1.-4. (No change.)

5. Violating the nondisclosure prohibitions of the examination , [or] aiding or abetting another in doing so or otherwise participating in the collection of test items for use, redistribution or sale ; [or]

6. Retaking or attempting to retake a test section by an individual holding a valid license or by an applicant who has unexpired credit for having already passed the same test section, unless the individual or applicant has been expressly directed to retake the test section pursuant to a Board order or expressly authorized by the Board to retake the test section[.] ; or

7. Reference to crib sheets, textbooks or other material or electronic media, other than that provided to the applicant as part of the examination, inside or outside the test site while the examination is in progress.

(d) (No change.)

13:29-1A.8 Licensure by waiver of examination for applicants licensed in another jurisdiction; application procedures

(a)-(b) (No change.)

(c) Applicants shall appear upon request before the Board or any Committee appointed by the Board for the purpose of determining whether the applicant satisfies the requirements set forth at N.J.A.C. 13:29-1A.3 , except that an applicant who holds a valid license issued by another jurisdiction prior to January 1, 2012 shall not be required to comply with the 150-hour education requirement set forth in N.J.A.C. 13:29-1A.3(c) .

13:29-1A.9 Public School Accountant's license; renewal; suspended license; reinstatement; inactive status

(a)-(c) (No change.)

(d) A licensee who has had his or her license suspended pursuant to (b) above may apply to the Board for reinstatement following the date of license expiration. A licensee applying for reinstatement shall submit:

1.-3. (No change.)

4. Any outstanding penalties imposed by the Board; [and]

[page=2726] 5. Evidence of holding an active New Jersey Certified Public Accountant, Public Accountant or Registered Municipal Accountant license; and

[5.] 6. (No change in text.)

(e) The Board shall send a notice of renewal to each licensee at least 60 days prior to the expiration of the license. If the notice to renew is not sent at least 60 days prior to the expiration date, no monetary penalties or fines shall be imposed upon the licensee for failure to renew during the period following license expiration, not to exceed the number of days short of 60 before the renewal was issued .

(f) A Public School Accountant holding an active Certified Public Accountant, Public Accountant or Registered Municipal Accountant license may, upon application to the Board, choose inactive Public School Accountant licensure status. A licensee electing inactive status shall be provided with the option of choosing either inactive paid or inactive unpaid status. A licensee electing inactive paid status shall pay the inactive renewal fee set forth in N.J.A.C. 13:29-1.5(d), which shall entitle the licensee to obtain all printed information disseminated by the Board to all active licensees. A licensee choosing inactive unpaid status shall not be required to pay the inactive renewal fee but shall not be entitled to obtain printed information disseminated by the Board to active licensees. A Public School Accountant holding an inactive Certified Public Accountant, Public Accountant or Registered Municipal Accountant license, consistent with N.J.A.C. 13:29-1A.10 or 2.3, shall elect inactive status. A Public School Accountant electing inactive paid or unpaid status shall not engage in active public school accounting practice in New Jersey for the entire triennial registration period unless the licensee applies to the Board to resume active practice. A Public School Accountant on inactive status seeking to resume the practice of public school accounting in New Jersey shall apply to the Board and shall submit:

1.-3. (No change.)

4. Evidence of an active New Jersey Certified Public Accountant, Public Accountant or Registered Municipal Accountant license.

(g) (No change.)

13:29-1A.10 Licensee requirements; renewal; suspended license; reinstatement; inactive status

(a)-(g) (No change.)

(h) The Board shall send a notice of renewal to each licensee at least 60 days prior to the expiration of the license. If the notice to renew is not sent at least 60 days prior to the expiration date, no monetary penalties or fines shall be imposed upon the licensee for failure to renew during the period following license expiration, not to exceed the number of days short of 60 before the renewal was issued .

(i) A licensee may, upon application to the Board, choose inactive licensure status. A licensee electing inactive status shall be provided with the option of choosing either inactive paid or inactive unpaid status. A licensee electing inactive paid status shall pay the inactive renewal fee set forth in N.J.A.C. 13:29-1.5(a), which shall entitle the licensee to obtain all printed information disseminated by the Board to all active licensees. A licensee choosing inactive unpaid status shall not be required to pay the inactive renewal fee but shall not be entitled to obtain printed information disseminated by the Board to active licensees. A licensee electing inactive paid or unpaid status shall not engage in the practice of accountancy in New Jersey for the entire triennial registration period unless the licensee applies to the Board to resume active practice. A licensee on inactive status seeking to resume the practice of accountancy in New Jersey shall apply to the Board and shall submit:

1.-3. (No change.)

(j) (No change.)

SUBCHAPTER 2. REGISTERED MUNICIPAL ACCOUNTANTS

13:29-2.1 Applications; requirements

Every applicant for the Registered Municipal [Accountant's examination] Accountant Examination shall submit to the Board a written application on a form to be provided by the Board and a two-inch by two-inch, passport photograph, front view, without a hat, taken within 30 days prior to application, provided that the applicant holds [a] an active New Jersey [license to engage in the practice of public accountancy that is in good standing] Certified Public Accountant or Public Accountant license .

13:29-2.2 Examination

(a)-(h) (No change.)

(i) The requirements in N.J.A.C. 13:29-1A.7 shall apply to the administration of, and candidates for, the Registered Municipal Accountant Examination.

13:29-2.3 Licensee requirements; renewal; suspended license; reinstatement; inactive status

(a)-(d) (No change.)

(e) A licensee who has had his or her license suspended pursuant to (c) above may apply to the Board for reinstatement within five years following the date of license expiration. A licensee applying for reinstatement shall submit:

1.-3. (No change.)

4. Any outstanding penalties imposed by the Board; [and]

5. Evidence of holding an active New Jersey Certified Public Accountant or Public Accountant license; and

[5.] 6. (No change in text.)

(f) If a Registered Municipal Accountant has had his or her license suspended pursuant to (c) above for more than five years, and wishes to have the license reinstated, then he or she shall successfully complete the examination required for initial licensure as set forth in N.J.A.C. 13:29-2.2 and shall submit the documents required by (e)1 through [4] 5 above.

(g) The Board shall send a notice of renewal to each licensee at least 60 days prior to the expiration of the license. If the notice to renew is not sent at least 60 days prior to the expiration date, no monetary penalties or fines shall be imposed upon the licensee for failure to renew during the period following license expiration, not to exceed the number of days short of 60 before the renewal was issued .

(h) A Registered Municipal Accountant holding an active New Jersey Certified Public Accountant or Public Accountant license may, upon application to the Board, choose inactive Registered Municipal Accountant licensure status. A Registered Municipal Accountant holding an inactive Certified Public Accountant or Public Accountant license, pursuant to N.J.A.C. 13:29-1A.10, shall elect inactive status. A licensee electing inactive status shall be provided with the option of choosing either inactive paid or inactive unpaid status. A licensee electing inactive paid status shall pay the inactive renewal fee set forth in N.J.A.C. 13:29-1.5(c), which shall entitle the licensee to obtain all printed information disseminated by the Board to all active licensees. A licensee choosing inactive unpaid status shall not be required to pay the inactive renewal fee but shall not be entitled to obtain printed information disseminated by the Board to active licensees. A Registered Municipal Accountant electing inactive paid or unpaid status shall not engage in active registered municipal accounting practice in New Jersey for the entire triennial registration period unless the licensee applies to the Board to resume active practice. A Registered Municipal Accountant on inactive status seeking to resume the practice of registered municipal accounting in New Jersey shall apply to the Board and shall submit:

1.-3. (No change.)

4. Evidence of an active New Jersey Certified Public Accountant or Public Accountant license.

(i) (No change.)

SUBCHAPTER 3. RULES OF PROFESSIONAL CONDUCT

13:29-3.1 Independence

(a) A licensee or a firm of which he or she is a partner, member or a shareholder shall not express an opinion on financial statements of an entity or organization in such a manner as to imply that he or she is acting as an independent public accountant with respect thereto unless he or she or his or her firm is independent with respect to such entity or organization. [Independence shall be considered to be impaired if, for example:

[page=2727] 1. During the period covered by the financial statements, during the period of the professional engagement, or at the time of expressing an opinion, the licensee or his or her firm:

i. Was associated with the entity or organization as a promoter, underwriter or voting trustee, or as a director or officer or in any capacity equivalent to that of a member of management or of an employee; or

ii. Was a trustee for any pension or profit-sharing trust of the entity or organization.

2. During the period of this professional engagement, or at the time of expressing his or her opinion, the partner, member or firm:

i. Had or was committed to acquire any direct or material indirect financial interest in the entity or organization; or

ii. Was a trustee of any trust or executor or administrator of any estate if such trust or estate had or was committed to acquire any direct or material indirect financial interest in the entity or organization; or

iii. Had any joint closely held business investment with the entity or organization or any officer, director or principal stockholder thereof which was material in relation to his or her firm's net worth; or

iv. Had any loan to or from the entity or organization or officer, director or principal stockholder thereof other than loans of the following kinds made by a financial institution under normal lending procedures, terms and requirements:

(1) Loans obtained by the licensee or his or her firm which are not material in relation to the net worth of the borrower;

(2) Home mortgages; and

(3) Other secured loans, except those secured solely by a guarantee of the licensee or the licensee's firm.]

(b) A person engaged in the practice of public accountancy, including a person who is not a member of the American Institute of Certified Public Accountants (AICPA), shall conform, in fact and appearance, to the independence standards established by the AICPA and the Board, and, where applicable, the U.S. Securities and Exchange Commission (SEC), the Government Accountability Office (GAO), the Public Company Accounting Oversight Board (PCAOB) and other national or international regulatory or professional standard setting bodies.

13:29-3.5 Auditing standards

A licensee of the licensee's firm shall not permit the licensee's name to be associated with financial statements in such a manner as to imply that the licensee is acting as an independent public accountant with respect to such financial statements unless the licensee has complied with applicable generally accepted auditing standards (GAAS) and, if applicable, generally accepted governmental auditing standards (GAGAS) . Statements on Auditing Standards (SAS) issued by the American Institute of Certified Public Accountants (AICPA), and the Public Company Accounting Oversight Board (PCAOB) , and other pronouncements having similar generally recognized authority, are considered to be interpretations of generally accepted auditing standards, and departures therefrom shall be justified by those who do not follow them.

13:29-3.6 Accounting principles

(a) (No change.)

(b) For purposes of this rule, generally accepted accounting principles (GAAP) are considered to be defined by pronouncements issued by the Financial Accounting Standards Board (FASB) and its predecessor and successor entities and similar pronouncements issued by other entities having similar general recognized authority.

13:29-3.12 Commissions, performance fees and referral fees

(a)-(e) (No change.)

(f) All disclosures in (d) and (e) above shall:

1. (No change.)

2. Shall be signed and dated by the person or entity to whom the licensee makes the referral or recommendation[, or] and by the person or entity who was referred [to] by the licensee.

(g) (No change.)

13:29-3.16 Records

(a) (No change.)

(b) A licensee or the licensee's firm shall not withhold client records for the non-payment of fees for services performed.

SUBCHAPTER 4. [(RESERVED)] PRACTICE PRIVILEGE; INDIVIDUALS AND FIRMS WITHOUT A NEW JERSEY OFFICE

13:29-4.1 [(Reserved)] Individuals licensed in other states; practice without a New Jersey license

(a) An individual whose principal place of business is not in New Jersey shall be entitled to practice as a certified public accountant in the State, consistent with the requirements of this subchapter and N.J.S.A. 45:2B-50.1, without having to obtain a license, notify the Board or pay a fee, provided the individual:

1. Holds a valid license as a certified public accountant from any state that the National Association of State Boards of Accountancy's (NASBA) National Qualification Appraisal Service has verified to be in substantial equivalence with the certified public accountant licensure requirements of the American Institute of Certified Public Accountants AICPA/NASBA Uniform Accountancy Act; or

2. Holds a valid license as a certified public accountant from any state that NASBA's National Qualification Appraisal Service has not verified to be in substantial equivalence with the certified public accountant licensure requirements of the AICPA/NASBA Uniform Accountancy Act, but that individual obtains from NASBA's National Qualification Appraisal Service verification that the individual's personal certified public accountant qualifications are substantially equivalent to the certified public accountant licensure requirements of the AICPA/NASBA Uniform Accountancy Act.

(b) Notwithstanding (a) above, an individual granted the practice privilege under (a) above may perform the following attest services for any entity with its home office in this State, only through a firm, which has registered with the Board under N.J.A.C. 13:29-4.2(a):

1. A financial statement audit or other engagement to be performed in accordance with the Statements on Auditing Standards (SAS);

2. An examination of prospective financial information to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE); or

3. An engagement to be performed in accordance with the Public Company Accounting Oversight Board (PCAOB) Auditing Standards.

(c) In the event the license from the state of the individual's principal place of business is no longer valid, the individual practicing under the practice privilege shall cease offering or rendering professional services in this State individually and on behalf of a firm.

13:29-4.2 Registration of firms located in other states

(a) A firm that does not have an office in New Jersey shall register with the Board and pay the fee set forth in N.J.A.C. 13:29-1.5, if the firm performs the following attest services for a client having its home office in this State:

1. A financial statement audit or other engagement to be performed in accordance with the Statements on Auditing Standards (SAS);

2. An examination of prospective financial information to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE); or

3. An engagement to be performed in accordance with the Public Company Accounting Oversight Board (PCAOB) Auditing Standards.

(b) A firm that does not have an office in New Jersey may perform compilation services or review financial statements in accordance with the Statements on Standards for Accounting and Review Services (SSARS), and may practice public accountancy, consistent with the requirements of this section, for a client having its home office in New Jersey and may use the title "Certified Public Accountant," "CPA," "Certified Public Account firm" or "CPA firm," without registering with the Board if:

[page=2728] 1. The firm meets the peer review requirements of N.J.S.A. 45:2B-67 and N.J.A.C. 13:29-5 and requirements applicable to firm ownership by non-licensed individuals in N.J.S.A. 45:2B-54.1a; and

2. The firm performs those services through an individual with practice privileges granted pursuant to N.J.A.C. 13:29-4.1.

(c) A firm that does not have an office in New Jersey and that is not subject to the requirements of (a) or (b) above may perform other professional services included in the practice of public accountancy while using the title "Certified Public Accountant," "CPA," "Certified Public Account firm" or "CPA firm" in this State without registering with the Board if:

1. The firm performs those services through an individual with practice privileges pursuant to N.J.A.C. 13:29-4.1; and

2. The firm can lawfully do so in the state where those individuals with practice privileges have their principal place of business.

(d) A firm that does not have an office in New Jersey and that is required to register with the Board pursuant to (a) above shall meet the following requirements:

1. Services for which registration is required are performed through an individual who qualifies for the practice privilege under N.J.A.C. 13:29-4.1;

2. Each owner of the firm, other than a nonlicensee, shall be a certified public accountant of any state or possession of the United States or the District of Columbia in good standing, and licensed to practice public accountancy where licensed;

3. There shall be a certified public accountant in the firm who has ultimate responsibility for each attest engagement. On all firm applications and renewal forms, an individual who qualifies for the practice privilege under N.J.A.C. 13:29-4.1 shall be designated as responsible and in charge of all professional matters relating to the practice of accountancy by the registered firm.

13:29-4.3 Definitions

For purposes of this subchapter, the following term shall have the following meaning, unless the context clearly indicates otherwise.

"Home office" means the location specified by the client as the address to which the services described above are directed.

SUBCHAPTER 6. CONTINUING PROFESSIONAL EDUCATION

13:29-6.2 Credit-hour requirements

(a) Each applicant for a triennial license renewal is required to complete, during the preceding triennial period, 120 hours of continuing professional education, except as provided in (c) through (f) below. All applicants shall complete a minimum of 20 hours of continuing professional education in each year of the triennial period. The types of continuing professional education programs and other sources of continuing professional education for which credit hours may be obtained are set forth in N.J.A.C. 13:29-6.5. The 120 hours of continuing professional education shall include at least 24 credit hours in the areas of auditing, review and compilation for licensees who are engaged in the practice of public accountancy. All applicants shall complete at least 72 credit hours of the required 120 credit hours in the technical subjects set forth in N.J.A.C. 13:29-6.3. All applicants shall complete four credit hours of the required 120 credit hours in the New Jersey law and ethics course set forth in N.J.A.C. 13:29-6.3A. The remaining 44 credit hours of the required 120 credit hours may include subjects specified in N.J.A.C. 13:29-6.4. No licensee shall receive credit for any course offered by a Board-approved continuing professional education sponsor in subjects other than those enumerated in N.J.A.C. 13:29-6.3, 6.3A or 6.4. For the triennial period commencing January 1, 2009 and thereafter, a licensee shall obtain a minimum of 60 credit hours of continuing professional education through didactic instruction.

1. (No change.)

(b)-(f) (No change.)

13:29-6.5 Continuing professional education programs and other sources of continuing professional education credit

(a)-(b) (No change.)

(c) In addition to the continuing professional education programs enumerated in (a) and (b) above, continuing professional education credit also shall be granted for the following if they involve subjects enumerated in N.J.A.C. 13:29-6.3 and 6.4.

1. (No change.)

2. Publications: Continuing professional education credit for [peer-reviewed] publications shall be awarded in accordance with the following:

i.-iv. (No change.)

v. Credit shall be given for each 50 minute period of [quality enhancement,] technical review or peer review program committee participation, not to exceed 60 credit hours for the triennial period.