State Board Adopts New Regulations
On Sept. 3, the New Jersey State Board of Accountancy adopted new regulations impacting the CPA profession, licensing and registered CPA firms. The changes, which are effective immediately, address areas such as the technical CPE credit requirement, new format for CPE and peer review exemption requests.
Access the complete list of regulations here. Following are some key highlights:
- NJAC 13:29-1.7 License Renewal – This new section combines the old sections NJAC 13:29-1A.9 Public School Accountants License, Renewal, Suspended License, Reinstatement, Inactive Status; NJAC 13:29-1A.10 (Certified Public Accountants) Licensee Requirements, Renewal, Suspended License, Reinstatement, Inactive Status; and 13:29-2.3 (Registered Municipal Accountants) License Requirements, Renewal, Suspended License, Reinstatement, Inactive Status into one section.
- NJAC 13:29-1.8 License Reactivation – This new section combines the rules for license reactivation for inactive licensees and also updates the regulations for 2014 changes to the statutes relative to such reactivation.
- NJAC 13:29-1.9 License Reinstatement – This section includes information relative to the reinstatement of licenses that have been administratively suspended.This section also updates the regulations for 2014 changes to the statutes relative to such reinstatement.
- NJAC 13:29-1A.4 Granting of Examination Credit; Reexamination; Conditional Credit – This section includes changes to the language in the regulations necessary in consideration of the anticipated “continuous testing” and elimination of the “testing windows” for the CPA exam by the AICPA and NASBA.
- 13:29-1A.8 – Applications for Licensure by Waiver of Examination for Applicants Licensed in Another Jurisdiction; Application Procedures – This section sets forth information required to be submitted along with the form provided by the Board for such applications including foreign jurisdictions.
- 13:29-1A.12 Orientation course – This new section relocates the existing requirement from NJAC 13:29-6.2(d).
- 13:29-3.5 Auditing Standards – A paragraph has been added to clarify that “other pronouncements having similar generally recognized authority” include both domestic and international pronouncements.Other minor administrative corrections are included in the section.
- 13:29-3.10 Advertising – This section includes several changes.First, the sentence “Solicitation by use of coercion, or over-reaching or harassing conduct is prohibited” has been added to section “(a)”.Second, section (a)3 related to the use of testimonial or laudatory statements or statements that professional services are of exceptional quality has been deleted.Lastly, a new section (a)7 has been added to prohibit any advertising that “implies the (licensee’s) ability to influence any court, tribunal, regulatory agency, or similar body or official”.
- 13:29-3.16(a)4 Records – This section clarifies client records prepared by the licensee.It states that “Licensee-prepared client records that would ordinarily constitute part of the client’s books and records, are contained in the licensee’s or his or her firm’s working papers, and are not otherwise available to the client.Copies of such records shall be produced to the client in the same manner, media, and format as the record was created by the licensee”.
- 13:29-6 Continuing Professional Education – Throughout the regulations for CPE, all references to CPE “hours” have been changed to “CPE credits” consistent with the 2016 revised CPE Standards.
- 13:29-6.2 (a) CPE Credit requirements – The revised regulation proposes changes to the number of required credits for certain types of credits.Credit requirements for “technical subjects” would change to 60 credits (currently 72) and for “other subjects” would allow to up to 56 credits (currently 44).These changes are consistent with 2016 changes to the CPE standards.
- 13:29-6.3 Qualifying technical subjects – This is a very minor change.The previous subject number 4, Computer sciences, and been changed to Information Technology.
- 13:29-6.5(a)2ii CPE programs and other sources of credit – This change clarifies that CPE credit will not be granted for college courses that were used to satisfy the individual’s initial professional licensure requirements or, CPA exam preparation or review courses.
- 13:29-6.5(a)4 CPE programs and other sources of credit – This section provides language that permits “Blended Learning” credits.
- 13:29-6.5(a)6 CPE programs and other sources of credit – This section provides language that permits “Nano Learning” credits.
- 13:29-6.5(c)2 CPE programs and other sources of credit – This change is similar to the change at 13:29-6.5(a)2ii in that CPE credit will not be awarded for instructing college or university courses that satisfy initial licensure requirements or CPA exam preparation or review courses.
- 13:29-6.7 CPE credit calculations – This change clarifies that the Board will accept partial credits of CPE courses.
Firm Licensing and Regulations
- 13:29-1A.11 Triennial Firm Registration – This section codifies the requirements for triennial firm registration in accordance with NJSA 45:2B-54 and 55.
- 13:29-5.3 Standards for peer reviews and sponsoring organizations – This section updates the website address for qualified sponsoring organizations.Also, there is a significant change for those firms seeking exemption to peer review.Firms that do not perform services that would require peer review are no longer required to file a request for an annual exemption.Instead, the proposed new regulations require firms that do not perform services that necessitate a peer review submit a request for exemption no later than June 30th of the first year the exemption is sought and for each subsequent triennial renewal period.It is believed that the Board will attempt to allow that exemption requests for subsequent renewal periods be made at the time of the registration renewal process.