18VAC5-21 Board of Accountancy Regulations

REGULATIONS

Vol. 25 Iss. 20 - June 08, 2009

TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING

BOARD OF ACCOUNTANCY

Chapter 21

Emergency Regulation

Title of Regulation: 18VAC5-21. Board of Accountancy Regulations (amending 18VAC5-21-30).

Statutory Authority: §§ 54.1-4402 and 54.1-4403 of the Code of Virginia.

Effective Dates: May 14, 2009, through May 13, 2010.

Agency Contact: Mike D. Roger, Acting Executive Director, Board of Accountancy, 9960 Mayland Drive, Perimeter Center, Suite 402, Richmond, VA 23233, telephone [phone], FAX [phone], or email [e-mail].

Preamble:

The regulation is needed to avoid a significant reduction in the board’s revenues and to remove an impediment to doing business in Virginia. The board believes the change would not harm the public and would help persons start their accounting careers sooner.

Although the CPA examination is a uniform, national examination, it is administered through the individual states for a fee set by the state. Each state has requirements for how much education is required for licensure and how much of that education must be obtained prior to taking the CPA examination through the state. The education required for licensure in Virginia is the same as the education required for licensure in substantially all other states. However, Virginia’s requirement that all of the education required for licensure must be obtained prior to taking the CPA examination through Virginia is more restrictive than the requirement of most of the other states. The relatively recent computerization of the CPA examination has made taking the examination through another state easier.

The Virginia Board of Accountancy (board) is promulgating an emergency regulation to reduce the amount of education required for licensure that must be obtained prior to taking the CPA examination through Virginia so that the requirement is no more restrictive than the requirement of most of the other states. The board believes that the reduction will not harm the public interest and that the change is necessitated by an emergency situation for three reasons:

1. Continuing a requirement that causes a person to take the additional steps needed to take the CPA examination through another state creates an impediment to doing business in Virginia. The Commonwealth has a long-standing commitment to eliminate impediments to doing business in Virginia.

2. Without this change, as knowledge of the ability to take the CPA examination through another state becomes more widespread, applications to take the CPA examination through Virginia will decrease significantly. The resulting significant reduction in the board’s revenues will occur relatively quickly.

3. The General Assembly in Chapter 804 of the 2007 Acts of Assembly gave the board emergency authority to promulgate this new regulation within 280 days of July 1, 2007.

The emergency regulation also defines "accounting concentration or equivalent," which is a requirement for licensure and for taking the CPA examination through Virginia.

18VAC5-21-30. Qualifications for CPA certificate.

A. Each applicant must be a person of good character as defined in 18VAC5-21-10.

B. Education prior to taking the CPA exam.

1. Each candidate whose application to sit for a CPA exam administered prior to July 1, 2006, shall have received a baccalaureate degree or its equivalent conferred by an accredited college or university as required by § 54.1-4409 B 1 of the Code of Virginia and shall at the time the application is received have completed the following courses at the undergraduate or graduate level to meet the accounting concentration requirement of § 54.1-4409 B 1 of the Code of Virginia:

a. At least 24 semester hours of accounting including courses covering the subjects of financial accounting, auditing, taxation, and management accounting; and

b. At least 18 semester hours in business courses (other than the courses described in subdivision 1 a of this subsection).

A candidate whose application is received under the requirements of this subdivision may take the CPA exam so long as the requirements of subsection C of this section are met.

2. Each candidate whose application to sit for a CPA exam administered on or after July 1, 2006, shall meet the requirements of § 54.1-4409 B 2 of the Code of Virginia and shall at the time the application is received have completed the following courses at the undergraduate or graduate level to meet the accounting concentration requirement of § 54.1-4409 B 2 of the Code of Virginia:

a. At least 30 semester hours of accounting, including courses covering the subjects of financial accounting, auditing, taxation, and management accounting; and

b. At least 24 semester hours in business courses (other than the courses described in subdivision 2 a of this subsection).

3. A quarter hour of coursework shall be considered the equivalent of two-thirds of a semester hour of coursework.

4. Each candidate with a degree or coursework earned at a nonaccredited college or university shall, if credit for such degree or coursework is to be considered by the board, (i) have his educational credentials evaluated by an academic credentials service approved by the board or an accredited institution, as defined in 18VAC5-21-10, to determine the extent to which such credentials are equivalent to the education requirements set forth in subdivisions 1 and 2 of this subsection and (ii) submit such evaluations to the board, which may accept or reject the evaluator's recommendations in whole or in part.

5. Evidence of having obtained the required education shall be submitted in the form of official transcripts transmitted in a manner determined by the board. In unusual circumstances, the board may accept other evidence it deems to be substantially equivalent.

B. Education.

1. In order for a person to take the CPA examination through Virginia, he must have obtained from one or more accredited institutions or from the National College at least 120 semester hours of education, a baccalaureate or higher degree, and an accounting concentration or equivalent prior to taking any part of the CPA examination.

2. For the purpose of complying with subdivision B 1 of this section and with subsection A 1 a of § 54.1-4409.2 of the Code of Virginia, obtaining an accounting concentration or equivalent requires obtaining at a minimum:

a. 24 semester hours of accounting courses, including courses in auditing, financial accounting, management accounting, and taxation; and

b. 24 semester hours of business courses, no more than six semester hours of which could be considered accounting courses.

Principles or introductory accounting courses cannot be considered in determining whether a person has obtained the 48 minimum number of semester hours required for an accounting concentration or equivalent.

C. CPA exam.

1. Each candidate shall pass (i) a national uniform CPA exam, as approved by the board, in auditing and attestation, regulation, business environment and concepts, business law and professional responsibilities, accounting and reporting (taxation, managerial, governmental and not-for-profit organizations), financial accounting and reporting, and other such related subject areas as deemed appropriate by the board and (ii) an ethics exam approved by the board. Each part of the CPA exam must be passed by attaining a uniform passing grade established through a psychometrically acceptable standard-setting procedure approved by the board.

2. The following rules for granting CPA exam credits are applicable until the computer-based CPA exam becomes effective.

If at a given sitting of the CPA exam a candidate passes two or more but not all sections, then the candidate shall be given credit for those sections that the candidate has passed and need not sit for reexamination in those sections provided the following conditions are met:

a. At that sitting, the candidate wrote all sections of the CPA exam for which the candidate did not have credit;

b. The candidate attained a minimum grade of 50 on each section taken at that sitting when the first two sections were passed and in each subsequent sitting attains a minimum grade of 50 on all sections taken at that sitting;

c. The candidate passes the remaining sections of the CPA exam within six consecutive CPA exams (irrespective of the date on which the CPA exam credit was earned) given after the one at which the first sections were passed; and

d. At each subsequent sitting at which the candidate seeks to pass any additional sections, the candidate writes all sections for which the candidate does not have credit.

3. The following rules for granting CPA exam credits will take effect beginning with the first computer-based CPA exam:

a. Granting of credit.

(1) Candidates will be allowed to sit for each section of the CPA exam individually and in any order.

(2) Candidates will retain credit for any section(s) passed for 18 months, without having to attain a minimum score on failed sections and without regard to whether they have taken other sections. Candidates will not be allowed to retake a failed section(s) within the same CPA exam window.

(3) Candidates must pass all four sections of the CPA exam within a "rolling" 18-month period, which begins on the date that the first section(s) passed is taken.

(4) In the event all four sections of the CPA exam are not passed within the rolling 18-month period, credit for any section(s) passed outside that 18-month period will expire and that section(s) must be retaken.

b. Conditional CPA exam credits.

(1) Candidates who have earned conditional credits on the noncomputer-based CPA exam as of the date of the first computer-based CPA exam will be given credits for the corresponding sections of the computer-based CPA exam as follows:

	Noncomputer-Based CPA Exam	Computer-Based CPA Exam
	Auditing	Auditing and Attestation
	Financial Accounting and Reporting (FARE)	Financial Accounting and Reporting
	Accounting and Reporting (ARE)	Regulation
	Business Law and Professional Responsibilities (LPR)	Business Environment and Concepts

(2) Candidates who have attained conditional status as of the launch date of the first computer-based CPA exam will be allowed a transition period to complete any remaining test sections of the CPA exam. The transition is the maximum number of opportunities that a candidate who has conditioned under the noncomputer-based CPA exam has remaining, at the launch of the computer-based CPA exam, to complete all remaining test sections, or the number of remaining opportunities under the noncomputer-based CPA exam, multiplied by six months, which is first exhausted.

4. The board may, at its discretion, waive any of the above requirements for carryover CPA exam credits, if such waiver is in the public interest.

5. Each candidate shall follow all rules and regulations established by the board with regard to conduct at the CPA exam. Such rules shall include instructions communicated prior to the CPA exam date and instructions communicated at the CPA exam site on the date of the CPA exam.

6. Failure to comply with the rules and regulations governing conduct in the CPA exam may result in the loss of established eligibility to sit for the CPA exam or credit for CPA exam parts passed.

7. A candidate to sit for the CPA exam shall obtain an application form from the board or its designee, complete the application in accordance with the instructions on the application, and submit the application together with all required documents to the board or its designee by the date determined by the board or its designee.

8. A candidate who fails to appear for the CPA exam or reexamination shall forfeit the fees charged for that CPA exam or reexamination unless excused by the board.

9. The fee to sit for the CPA exam is established in 18VAC5-21-20 G, whether paid directly to the board or to a designee under contract to the board.

10. The board or its designee will forward notification of eligibility for the computer-based CPA exam to NASBA's National Candidate Database.

11. Cheating by a candidate in applying for, taking or subsequent to the CPA exam will be deemed to invalidate any grade otherwise earned by a candidate on any test section of the CPA exam, and may warrant summary expulsion from the CPA exam site and disqualification from taking the CPA exam for a specified period of time.

12. Notwithstanding any other provisions under these rules, the board may postpone scheduled CPA exams, the release of grades, or the issuance of certificates due to a breach of CPA exam security; unauthorized acquisition or disclosure of the contents of a CPA exam; suspected or actual negligence, errors, omissions, or irregularities in conducting a CPA exam; or for any other reasonable cause or unforeseen circumstances.

D. Experience.

1. Each applicant for initial issuance of a CPA certificate under this section shall provide documentation of having met the experience requirements established by § 54.1-4409 C of the Code of Virginia, which requires at least one year of acceptable experience in accounting or a related field. The experience may include providing any type of service or advice involving the use of accounting, management, financial, tax, or consulting advisory skills or services. Acceptable experience shall include employment in government, industry, academia or public accounting or related services. The applicant's experience may be supervised by a non-CPA certificate holder, although, when completing the application for the CPA certificate, the experience must be verified by a CPA certificate holder.

2. One year of 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 subdivision 1 of this subsection.

VA.R. Doc. No. R09-1099; Filed May 14, 2009, 3:37 p.m.