US Laws, Codes, Statutes & Cases

This regulation database is current through State Register Volume 29, Issue 10, effective October 28, 2005. Changes to the regulations enacted by the 2006 General Assembly, which will convene in January 2006, will be incorporated as soon as possible. Some regulations approved by the 2006 General Assembly may take immediate effect. The State of South Carolina and the South Carolina Legislative Council make no warranty as to the accuracy of the data, or changes which may have been enacted since the 2005 Regular Session or which took effect after this database was prepared and users rely on the data entirely at their own risk.

(Statutory Authority: 1976 Code Sections 40-2-140 and 40-2-190)

1-01. Definition of Firm and Licensee, Definition of Holding Out; Firms Jointly Owned by Certified Public Accountants and Public Accountants.

A. Definition of "Firm" and "Licensee." When used in these regulations, "firm" shall refer to a person or persons practicing public accounting in the form of a proprietorship, partnership, limited liability partnership, limited liability company, or professional corporation or association. A "Licensee" shall refer to a person who holds a license from this board as a (Certified Public Accountant (CPA), Public Accountant (PA) or Accounting Practitioner.

B. Definition of "Holding Out." The existence of any of the following conditions with reference to a person or firm will mean that person or firm "holds himself or itself out" to the public within the meaning of this act:

(1) use of the title or designation "Certified Public Accountant" or the abbreviation "CPA" or the title "Public Accountant" or the abbreviation "PA" or the title "Accounting Practitioner" or any other title, designation, words, abbreviations, signs, cards, or other devices tending or intended to indicate the offering of accounting services to the public; or

(2) maintenance of an office or other quarters in connection with which there is an inference or implication through the use of any listings, titles, names, abbreviations, or devices that accounting services are offered to the public therefrom; or

(3) offering to render or rendering the following services to the public; or

(a) offering to prospective clients in South Carolina to perform for compensation one (1) or more of these services:

(i) the development, recording, analysis, or presentation of financial information including, but not limited to, the preparation of financial statements; or

(ii) advice or assistance in regard to accounting controls, systems, and procedures; or

(b) in any manner holding himself or itself out to the public in South Carolina as skilled in one(1) or more of the type of services described in item (a).

C. Public Accounting Firms Owned Jointly by Certified Public Accountants and Public Accountants. Except as permitted by Regulation 1-21(D), public accounting firms owned jointly by Certified Public Accountants and Public Accountants in their holding out to the general public and in the signing of reports and related documents (either in the firm name or as individual owners) must employ a style which indicates that the firm is a firm of Public Accountants and not a firm of Certified Public Accountants. However, a Certified Public Accountant may style himself as such on the letterhead of his firm and in directories and listings which do not disclose his firm affiliation. A Certified Public Accountant signing a document on behalf of the firm must not use the CPA designation.

D. Public Accounting Firms Owned Jointly by Public Accountants and Accounting Practitioners. Except as permitted by Regulation 1-21 (D). Public accounting firms owned jointly by Public Accountants and Accounting Practitioners must in their holding out to the general public employ a style which indicates that the firm is a firm of Accounting Practitioners.

1-02. Practices Prohibited by Unlicensed Persons; Disclaimers Required; Title Restrictions.

A. Practices Prohibited by Unlicensed Persons. A person or firm not registered or licensed under this article as a Certified Public Accountant or a Public Accountant shall not sign in his own name nor in a firm's name, an accountant's or auditor's professional opinion or certificate with respect to financial statements or other financial data. No corporation or other entity (except for a firm as defined above) shall sign an accountant's or auditor's professional opinion or certificate with respect to financial statements or other financial data. This does not prohibit any officer, employee, partner or principal, in his capacity as such, from certifying or attesting to the accuracy or fairness of any statement or report of his organization, nor does it prohibit any act of a public official or public employee required in the performance of his duties as such.

B. Disclaimers Required by Unlicensed Persons or Organizations.

(1) A person, firm, corporation, or other entity not registered or licensed under this article as a Certified Public Accountant or Public Accountant shall not permit his name, or its name, to be associated with financial statements purporting to show financial position or results of operations in a manner indicating that the person or firm has expert knowledge in accounting or auditing unless the person, firm, corporation, or other entity:

(a) disclaims an opinion on the statements; and

(b) indicates in such disclaimer that he or it did not audit the statements and is prohibited by law from expressing an opinion on the statements.

(2) The name of a person, firm, corporation, or other organization will be deemed to be associated with the financial statements if the financial statements are:

(a) prepared or submitted on pages which show the name of the person, firm, corporation, or other organization; or

(b) submitted in a cover or binder which shows the name of the person, firm, corporation, or other organization; or

(c) submitted with a cover letter clearly showing the name of the person, firm, corporation, or other organization; or

(d) submitted in any other manner which would cause the persons to whom such statements are submitted to have reason to believe that the person, firm, corporation, or other organization has expert knowledge in accounting or auditing.

(3) A disclaimer is not required if the name is associated with financial statements other than those purporting to show financial position or results of operations. However, the expression of an accountant's or auditor's professional opinion with respect to such other financial statements is reserved under Section 40-2-50 (a) and (b) to Certified Public Accountants and Public Accountants, except for certain acts performed by officers, employees, partners, principals, public officials, and public employees in the performance of their required duties.

(4) Any person, firm, corporation, or other entity not holding a license to practice under this article and who offers to engage or engages in the performance of those services set forth in Regulation 1-01B(3) must disclose in all signs, cards, letterheads, advertisements, directories, and other means used to disclose his or its practice or business that he or it is not licensed under the South Carolina Accountancy Law. The legend "Not Licensed Under the South Carolina Accountancy Law" is an example of the type of disclosure or disclaimer required. The disclaimer of a license must be no less prominent than the least prominent line otherwise used in the evidence of holding out. Use of the disclaimer does not permit an unlicensed person to engage in the practices which are otherwise prohibited to persons, or firms who are not registered or licensed Certified Public Accountants or Public Accountants.

(5) The offering or rendering of data processing services by mechanical or electronic means is not prohibited by this article. However, this exception applies only to the processing of accounting data as furnished by a client and does not include the classification or verification of such accounting data or the analysis of the resulting financial statements by other than mechanical or electronic means. Certain services relating to the use of mechanical or electronic equipment are not prohibited by this article. 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, and does not cover study and/or advice regarding accounting controls, systems, and procedures in general.

C. Disclaimer Required by Accounting Practitioners.

An Accounting Practitioner or firm of Accounting Practitioners is permitted to associate his or its name with complied financial statements as defined by Professional Standards for Accounting and Review Services, if the following disclaimer is used:

I (we) have compiled the accompanying balance sheet of XYZ Company as of December 31, XXXX, and the related statements of income, retained earning and cash flows for the year then ended, in accordance with statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. A Compilation is limited to presenting, in the form of financial statements, information that is the representation of management (owners). I (we) have not audited or reviewed the accompanying financial statements and I am (we are) prohibited by law from expressing an opinion on them.

D. Title Restrictions.

(1) Certified Public Accountants may hold themselves out as such or as Public Accountants or as accountants or auditors.

(2) Public Accountants may hold themselves out as such or as accountants or auditors.

(3) Accounting Practitioners may hold themselves out as Accounting Practitioners, but not as accountants or auditors.

(4) Persons not licensed or registered as Certified Public Accountants, Public Accountants, or Accounting Practitioners shall not hold themselves out as such.

(5) Persons not licensed or registered as Certified Public Accountants or Public Accountants shall not hold themselves out by use of a title composed of or indicating either "accountant" or "auditor" or both without indicating that they are not registered or licensed.

(6) No person shall assume or use a title, designation, or abbreviation prohibited by Section 40-2-60(E).

1-03. Officers; Vacancy.

At the first meeting of the Board after a vacancy in an office occurs, the Board shall elect a member to fill such vacancy.

1-04. Rules of Professional Conduct.

The rules of professional conduct shall be the Code of Professional Ethics contained in Article 3. The rules shall apply to all licensees under the accounting law administered by the Board except where a provision specifically makes an exception.

1-05. Certified Public Accountant Examinations.

A. The Board shall use the Uniform Certified Public Accountant Examination prepared by the American Institute of Certified Public Accountants. In addition there shall be an examination in professional ethics required of those persons who have successfully passed the Uniform Certified Public Accountant Examination. The Board, in its discretion, may waive the examination in professional ethics upon its acceptance of an affidavit by the candidate acknowledging that he has read the rules of conduct adopted by the Board and subscribes both to the spirit and letter of the rules and agrees to observe them faithfully in the performance of his professional work.

B. The Board shall use the Uniform Grading Service of the American Institute of Certified Public Accountants, subject to review and exception by the Board.

C. Examinations shall be held in the months of May and November each year at sites designated by the Board. Notice of the time and place of examination shall be mailed to each candidate whose application to sit for the examination has been filed with and approved by the Board. Announcement of the examinations shall be published in newspapers of general circulation as selected by the Board.

D. Examination Applications and Fees.

(1) Completed applications for examination and re-examination shall be submitted on forms furnished by the Board not later than September 15 for the November examination and not later than March 15 for the May examination. If the filing date falls on a Saturday, Sunday or federal holiday, the application shall be considered timely filed if postmarked or received in the Board office on the next business day. Only a postmark affixed by the United States Postal Service shall be considered the postmark. The Board may request the submission of photo identification, fingerprints, or other identification information with the application as deemed necessary to insure the integrity of the exam administration.

(2) Examination fees, as set by the AICPA, must accompany the application. If a check in payment of examination fees fails to clear the bank, the application shall be deemed incomplete and the application shall be returned to the candidate.

(3) In order for an application to be considered a completed application all blanks and questions on the application form must be completed and answered and all applicable documentation must be attached.

(4) Official transcripts signed by the college or university registrar and bearing the college or university seal shall be required to prove education and degree requirements. Photocopies of transcripts must not be accepted.

(5) If a candidate is not successful in retaining credit for any section of the examination, the candidate's application, and documentation accompanying the application shall be retained in Board files for a period of three (3) years after the date of the examination during which period the candidate, otherwise qualifying for the examination, shall not be required to resubmit documentation on file in the Board office.

E. Passing Grades and Conditional Credit.

(1) A candidate shall be required to sit for all sections of the examination for which the candidate does not hold conditional credit, unless otherwise directed by the Board.

(2) In order to pass the examination, a candidate shall be required to pass all sections of the examination with a grade of seventy-five (75) or higher.

(3) If any candidate who is sitting for all sections of the examination received a passing grade in any two (2) or more sections, the candidate shall receive conditional credit for the sections passed and is entitled to be reexamined in the sections not passed during the next six (6) consecutive examinations given by the Board provided that:

(a) if the candidate passed two (2) sections, an average minimum grade of fifty (50) must be attained on the sections not passed; and

(b) if the candidate passed three (3) sections at one (1) sitting, a minimum grade is not required on the section not passed.

F. Transfer of Credit.

(1) A candidate may arrange to have credits for passing sections of the examination under the jurisdiction of another state or territory of the United States transferred to this State subject to the following conditions:

(a) the candidate met the qualifications to take the examination in effect in this State at the time the examination was taken in the other state or territory; and

(b) the candidate was not a resident of South Carolina at the time of taking the examination in the other state or territory; and

(c) the passing grades are those awarded by the American Institute of Certified Public Accountants Advisory Grading Service; and

(d) the other state or territory certifies to the accuracy of the grades awarded.

(2) Credits transferred for less than all sections of the examination are subject to the same conditional credit rules or partial credit rules as if the examination had been taken in South Carolina.

1-06. Qualifications for Candidates for Certified Public Accountant Examination.

A. The applicant must be eighteen (18) years of age or older.

B. The applicant must submit proof acceptable to the Board that he or she has no history of dishonest or felonious acts. A dishonest or felonious act is defined for purposes of this section as any conviction of a crime of moral turpitude or felony.

(1) The Board may obtain information from the South Carolina Law Enforcement Division (SLED) or any other law enforcement agency regarding violations of any federal, state, municipal, or other law enforcement agency regarding violations of any federal, state, municipal or other law, statute, or ordinance.

(2) The Board may perform such other investigations as necessary to determine that the applicant does not have a history of dishonest or felonious acts.

C. Education of Applicants before July 1, 1997.

(1) Each applicant must have a baccalaureate degree from a college or university acceptable to the Board, including a minimum of twenty-four (24) hours or the equivalent in accounting hours. No more than three (3) semester hours in business law courses and three (3) semester hours in taxation courses may be counted as accounting courses.

(2) The Board will accept any college or university accredited by the Southern Association of Colleges and Schools or any other regional accrediting association as having equivalent standards, or any independent senior college in South Carolina certified by the State Department of Education for teacher training.

D. Education of Applicant after June 30, 1997.

(1) Each applicant must have at least one hundred fifty (150) semester hours of college education including a baccalaureate or higher degree conferred by a college or university acceptable to the Board, the total educational program to include an accounting concentration or equivalent.

(2) The Board shall accept any college or university accredited by the Southern Association of Colleges and Schools or any other regional accrediting association having the equivalent standards, or any independent senior college in South Carolina certified by the State Department of Education for teaching training, and accounting and business programs accredited by the American Assembly of Collegiate Schools of Business (AACSB) or any other accrediting agency having equivalent standards.

(3) An applicant shall be deemed to have met the education requirement if, as part of the one hundred fifty (150) semester hours of education, the applicant has met any one (1) of the following conditions:

(a) earned a graduate degree with a concentration in accounting from a program that is accredited in accounting by an accrediting agency recognized by the Board; or

(b) earned a graduate degree from a program that is accredited in business by an accrediting agency recognized by the Board and completed at least twenty-four (24) semester hours in accounting at the undergraduate level or fifteen (15) semester hours at the graduate level, or an equivalent combination thereof, including courses covering the subjects of financial accounting, auditing, taxation, and management accounting; or

(c) earned a baccalaureate degree from a program that is accredited in business by an accrediting agency recognized by the Board and completed (24) semester hours in accounting at the undergraduate or graduate level, including courses covering the subjects of financial accounting, auditing, taxation, and management accounting; and completed at least twenty-four (24) semester hours in business courses (other than accounting courses) at the undergraduate or graduate level; or

(d) earned a baccalaureate or higher degree and completed at least twenty-four (24) semester hours in accounting at the upper division or graduate level at an institution recognized by the Board and including at least one (1) course each in financial accounting, auditing, taxation, and management accounting; and completed at least twenty-four (24) semester hours in business courses (other than accounting courses) at the undergraduate or graduate level.

E. The education requirements for a re-examination applicant shall be those requirements which were in effect when the applicant first took the examination, provided the applicant has been re-examined at least once each calendar year subsequent to the effective date of any change in educational requirements.

F. In order for the educational requirements of an applicant who is a South Carolina Public Accountant duly licensed and in good standing and who was practicing or employed in public accounting on July 1, 1965, to be waived, the applicant must submit evidence satisfactory to the Board that on July 1, 1965:

(1) public accounting constituted the applicant's principal trade, business, or employment; and

(2) the applicant or the applicant's employer offered accounting services of a general type normally offered by Public Accountants; and

(3) that such services were performed on a full-time basis.

G. On an individual basis, the Board may deem education from a foreign college or university as qualifying education in cases where the foreign education has been evaluated by a Board approved education evaluation service and deemed to be equivalent to the provisions of Section 40-2-180 and the provisions of this regulation.

1-07. Experience Required in Addition to Examination.

A. Required experience shall include:

(1) at least two (2) years of accounting experience satisfactory to the Board in public, governmental, or private employment under the direct supervision and review of a Certified Public Accountant or Public Accountant licensed to practice accounting in some state or territory of the United States or the District of Columbia; or

(2) at least five (5) years experience teaching accounting in a college or university recognized by the Board; or

(3) any combination of experience determined by the Board to be substantially equivalent to the foregoing.

B. Experience other than public accounting experience shall count only in proportion to duties which, in the opinion of the Board, contribute to competence in public accounting.

C. Experience may be gained in either full-time or part-time employment. Two thousand (2000) hours of part-time accounting experience is deemed to be equivalent to one (1) year. Experience may not accrue more rapidly than forty (40) hours per week.

D. The five (5) years of teaching experience provided for under A(2) shall consist of five (5) years of full-time teaching of accounting courses at a college or university accredited by the Southern Association of Colleges and Schools or any other regional accrediting associations having equivalent standards, or any independent senior college in South Carolina certified by the State Department of Education for teacher training.

(1) In order for teaching experience to qualify as full-time teaching, the applicant must have been employed on a full-time basis as defined by the educational institution where the experience was obtained; provided, however, that teaching less than twelve (12) semester hours per year, or the equivalent in quarter hours, shall not be considered as full-time teaching experience.

(2) Experience credit for teaching on a part-time basis shall qualify on a pro rata basis based upon the number of semester hours required for full-time teaching at the educational institution where the teaching experience was obtained.

(a) Teaching experience may not accrue more rapidly than elapsed chronological time.

(i) An applicant shall not be granted credit for full-time teaching completed in less than one (1) academic year.

(ii) An applicant shall be granted no more than one (1) full-time teaching year credit for teaching completed within one (1) calendar year.

(3) Teaching experience shall not be granted for teaching subjects outside the field of accounting.

(a) Subjects considered to be outside the field of accounting include, but are not limited to, business law, finance, computer applications, personnel management, economics, and statistics.

(4) Of the five (5) years of full-time teaching experience, credit for teaching accounting principles courses or fundamental accounting (below intermediate accounting) may not exceed two (2) full-time teaching years and the remaining three (3) full-time teaching years experience must be obtained in teaching courses above accounting principles.

(a) Accounting courses considered to be above accounting principles include, but are not limited to intermediate accounting, advanced accounting, auditing, income tax, financial accounting, management accounting, and cost accounting.

E. A record of experience must be detailed on Certificate of Experience forms provided by the Board.

(1) A separate Certificate of Experience form shall be required from each employer.

(2) The Certificate of Experience form shall be signed by:

(a) the supervisory licensed Certified Public Accountant; or

(b) the dean or department head of the institution where qualifying teaching experience was gained.

(3) The Board may require such other information as it deems necessary to determine the acceptability of experience, including, but not limited to:

(a) review of work papers and other work products; and

(b) review of time record; and

(c) interviews with applicants and supervisors.

1-08. Certificate Fees; License Fee.

The fee for the application for an original certificate shall be twenty ($20.00) dollars. The annual license fee required by Regulation 1-11 shall be pro-rated for each month or fraction thereof from the date the certificate is issued until the next renewal date.

1-09. Reciprocity Certificates.

A. In order for the examination to be waived and a certificate issued to a person who is the holder of a certificate as a Certified Public Accountant issued under the law of some other state, the person must submit an application on forms furnished by the Board.

B. An applicant may qualify to have a certificate issued by reciprocity under Section 40-2-240(A)(2) provided:

(1) the Board deemed the requirements for issuing or granting certificates in the other state, territory, or District of Columbia to be substantially equivalent to the requirements established in this State; and

(2) the Board has entered into an agreement of reciprocity with the other state or political subdivision under which the other state or political subdivision grants similar privileges to holders of certificates issued by this State; and

(3) the Executive Director or similar officer of the Accountancy Board of the other state or political subdivision certifies to the fact that the applicant:

(a) passed the Uniform Certified Public Accountant Examination prepared and graded by the American Institute of Certified Public Accountants; and

(b) holds an original certificate as a Certified Public Accountant issued by the other state or political subdivision and such certificate is current, unrestricted, and in good standing; and

(c) holds a current license or permit to practice public accounting and such license or permit is current, unrestricted, and in good standing.

C. An applicant who qualifies for waiver of the examination under Section 40-2-240(A)(1) shall:

(1) obtain certification, on forms provided by the Board, from the other state or political subdivision certifying that the applicant:

(a) passed the Uniform Certified Public Accountant Examination prepared and graded by the American Institute of Certified Public Accountants; and

(b) holds a current certificate as a Certified Public Accountant which is current, unrestricted, and in good standing in the other state; and

(c) holds a license or permit to practice public accounting which is current, unrestricted, and in good standing in the other state. If the applicant does not hold a current license or permit issued by the other state, the Board may waive this requirement in individual cases where the applicant otherwise qualifies for a South Carolina certificate and submits a continuing professional education report showing compliance with the continuing professional education required of Certified Public Accountants currently licensed to practice in this State.

(2) Submit evidence that the applicant's education and experience was equal to or exceeded one (1) of the following three (3) conditions:

(a) five (5) years of experience outside of this State in the practice of public accountancy after passing the Uniform Certified Public Accountant Examination and within ten (10) years immediately preceding the application; or

(b) the current education and experience requirements in this State for issuance of a certificate as set forth in Regulation 1-06 and 1-07; or

(c) the education requirements in effect in this State at the time the examination was taken in the other state or territory and submit evidence that the applicant's experience equals or exceeds one (1) of the following three (3) conditions:

(i) at least three (3) years of experience in the public practice of accounting as a Certified Public Accountant licensed to practice in the other state; or

(ii) the experience required of South Carolina applicants at the time the applicant's certificate was issued in the other state; or

(iii) the current experience requirement in this State.

D. An applicant may qualify to have a certificate issued by reciprocity under Section 40-2-240(B) provided:

(1) the applicant's foreign designation is from the Canadian Institute of Chartered Accountants, and the provincial or territorial Institute of Chartered Accountants which issued or granted the applicant's chartered accountant designation:

(a) makes similar provisions to allow a person who holds a valid certificate issued by this State to obtain a Chartered Accountant Designation; and

(b) certifies to the fact that the applicant holds an original designation as a Chartered Accountant and such designation is current, unrestricted, and in good standing; and

(c) certifies to the fact that the applicant passed the Canadian Institute of Chartered Accountant's Uniform Final Examination; or

(2) the applicant's foreign designation if from a country which has entered into a formal reciprocity agreement with the International Qualifications Appraisal Board (IQAB), a joint body of the National Association of State Boards of Accountancy and the American Institute of Certified Public Accountants charged with evaluating professional credentialing of Certified Public Accountants, or their equivalent, of countries other than the United States; and negotiating principles of reciprocity agreements with the appropriate professional and/or governmental bodies of other countries, and the applicant's foreign country:

(a) makes similar provisions to allow a person who holds a valid certificate issued by this State to obtain an equivalent designation; and

(b) certifies to the fact that the applicant holds an original designation which is current, unrestricted, and in good standing; and

(c) certifies to the fact that the applicant passed the country's examination equivalent to the Uniform Certified Public Accountant Examination; and

(3) the applicant passed the Canadian Chartered Accountant's Uniform Certified Public Accountant Qualification Examination or the International Uniform Certified Public Accountant Qualification Examination (IQEX) prepared and graded by the American Institute of Certified Public Accountants; and

(4) the applicant's experience is, in the discretion of the Board, substantially equivalent to the experience required by Section 40-2-190 and Regulation 1-07 except that such experience may have been obtained under either the direct supervision and review of a firm of practicing accountants licensed by the Canadian Institute of Chartered Accountants or one (1) of the professional and/or governmental bodies which has entered into a formal agreement with IQAB, or a Certified Public Accountant licensed to practice public accounting in some state or territory of the United States at the time the qualifying experience was obtained.

E. The applicant shall submit such evidence as required by the Board to show that the applicant does not have any history of dishonest or felonious acts. A dishonest or felonious act is defined for this purpose as conviction of a crime of moral turpitude or a felony. The Board may obtain information from the South Carolina Law Enforcement Division (SLED) or any other law enforcement agency regarding violations of any federal, state, municipal or other law, statute, or ordinance and may perform such other investigations as necessary to determine that the applicant does not have a history of dishonest or felonious acts.

F. Evidence Required.

(1) In cases where evidence of education is required the evidence to be submitted shall be an official transcript signed by the college or university registrar and bearing the college or university seal if the education was obtained after July 1, 1984. Education before July 1, 1984, may be described on the application form and attachments.

(2) In cases where evidence of experience is required, the evidence to be submitted shall be a Certificate of Experience completed on forms provided by the Board if the experience was obtained after May 24, 1980. Experience before May 24, 1980, may be described on the application form and attachments.

G. The application fee shall be fifty ($50.00) dollars and shall not be refundable for any cause.

H. Upon approval of the application the following fees shall be due and payable before issuance of the certificate:

(1) certificate application fee of twenty ($20.00) dollars; and

(2) prorated license fees for the current year as required by Regulation 1-11.

1-10. Non-resident Registration.

A. A non-resident Certified Public Accountant or Public Accountant will not be considered to be holding himself out as a Certified Public Accountant or Public Accountant in this State when the services performed within this State are incident to his regular practice outside this State and such services do not exceed a total of ten (10) days in one (1) calendar year. All other non-residents practicing within this State must register with the Board and comply with all rules, regulations, and restrictions required of bona fide residents who are licensed to practice. For purposes of this regulation, practice within this State as defined in Sections 40-2-30, 40-2-40, 40-2-410, and Regulation 1-01 shall include practice by way of electronic means such as the Internet, if the recipient of the service is a resident of South Carolina.

B. If a non-resident owner is not qualified to register with the Board, then the supervisory owner or employee performing services in this State must register as an individual. It is not necessary to register every staff Certified Public Accountant or Public Accountant engaged in this State, provided the engagement is under the immediate supervision of a registered Certified Public Accountant or Public Accountant. Annual fees for registration are sixty ($60.00) dollars for an individual and one hundred twenty ($120.00) dollars for a firm.

1-11. Annual License Fee.

A. The Board shall require the payment of an annual fee by:

(1) every person holding a Certificate of Registration as a Certified Public Accountant issued by the Board; and

(2) every person holding a license as a Public Accountant issued by the Board; and

(3) every person holding a license as an Accounting Practitioner issued by the Board.

B. The annual fee shall be an amount set by the Board not to exceed one hundred ($100.00) dollars annually, except that persons who have fully retired from the practice of public accounting and wish to retain their certificate as a Certified Public Accountant or license as a Public Accountant or license as an Accounting Practitioner may do so by payment of an annual fee of ten ($10.00) dollars.

C. The annual license fee shall be prorated for each month or fraction thereof from the date an initial certificate as a Certified Public Accountant or initial license as a Public Accountant or initial license as an Accounting Practitioner is issued until the next renewal date.

D. The annual fee shall be for the licensing period beginning July 1 of each year and shall be payable on or before that date.

E. Payment submitted by mail shall be considered timely paid if postmarked not later than July 1. If the first day of July falls on a Saturday, Sunday or federal holiday, payment shall be considered timely made if postmarked or received in the Board office on the next business day. Only a postmark affixed by the United States Postal Service shall be considered the postmark.

F. The penalty for late payment of the annual fee shall be sixty ($60.00) dollars.

G. The penalty for late payment of the annual fee may be waived by the Board on an individual basis. The application for waiver of the penalty must be made in writing. The Board may waive the penalty only in cases of illness, mental or physical incapacity, retirement from practice, and similar situations.

1-12. Revocation of Registration and Penalties for Reinstatement.

A. A Certificate of Registration as a Certified Public Accountant or license as a Public Accountant or Accounting Practitioner which has been revoked because of non-payment of the annual renewal fee may be reinstated provided the following three (3) conditions have been met:

(1) payment of a specific reinstatement penalty of fifty ($50.00) dollars; and

(2) payment of all renewal fees and penalties that would have been required had the Certificate of Registration or license not been revoked; and

(3) submission of a continuing education report showing completion of such continuing professional education as would have been required had the Certificate of Registration or license not been revoked, not to exceed a total of one hundred twenty (120) hours.

1-13. Surrender of Certificate.

Any Certificate of Registration or license which is lapsed or is revoked or suspended by the Board must be surrendered to the administrator of the Board.

1-14. Firm and Office Registration.

A. Annually, on or before July 1, each office of a firm established or maintained in this State for the practice of public accounting by a Certified Public Accountant, Public Accountant, or firm of Certified Public Accountants or Public Accountants shall register with the Board on forms provided by the Board.

B. Annually, on or before July 1, each office of a firm established in this State for the practice of public accounting by an Accounting Practitioner or firm of Accounting Practitioners shall be registered with the Board on forms provided by the Board. Each such office shall be under the direct supervision of a resident manager who is an Accounting Practitioner, Certified Public Accountant, or Public Accountant licensed by the Board.

C. Each resident manager shall maintain his or her personal residence within a reasonable commuting distance of the registered office and shall be present at such office during the principal portion of the time that such office is open for business.

D. All owners of a firm holding out in this State for the practice of public accounting shall either:

(1) be registered with the Board in accordance with this regulation or Regulation 1-11; or

(2) in the case of a non-Certified Public Accountant owner, be listed on the annual firm registration form provided by the Board, as described in (A) above. By declaration on this form, under penalty of perjury, a resident, licensed owner shall certify that all non-Certified Public Accountant owners have met the continuing professional education and other applicable provisions contained in Regulation 1-21(D).

1-15. Accounting Practitioners; Qualifications.

A. In order to obtain a license as an Accounting Practitioner, the applicant shall submit such evidence as required by the Board to show that the applicant does not have a history of dishonest or felonious acts. A dishonest or felonious act is defined for this purpose as conviction of a crime of moral turpitude or a felony. The Board may obtain information from the South Carolina Law Enforcement Division (SLED) or any other law enforcement agency regarding violations of any federal, state, municipal or other law, statute, or ordinance and may perform such other investigation as necessary to determine that the applicant does not have a history of dishonest or felonious acts.

B. If the application for a license is based on education:

(1) the applicant shall submit an official transcript signed by the college or university registrar and bearing the college or university seal to prove education and degree requirements; photocopies of transcripts will not be accepted; and

(2) a major in accounting shall include at least twenty-four (24) semester hours, or equivalent in quarter hours, of credit in accounting courses. No more than three (3) semester hours in business law courses and three (3) semester hours in taxation courses may be counted as accounting courses; and

(3) the Board shall accept any college or university accredited by the Southern Association of Colleges and Schools and any other accrediting association having the equivalent standards or any independent senior college in South Carolina certified by the State Department of Education for teaching training.

C. If the application for a license is based on examination:

(1) the Board shall use the Uniform Certified Public Accountant Examination prepared by the American Institute of Certified Public Accountants; and

(2) the Board shall use the Uniform Grading Service of the American Institute of Certified Public Accountants, subject to review and exception by the Board; and

(3) the examination shall be held in the months of May and November each year at sites designated by the Board; notice of the time and place of examination shall be mailed to each approved applicant for examination; and

(4) completed applications for the next scheduled examination shall be submitted on forms furnished by the Board not later than September 15 for the November examination and not later than March 15 for the May examination. Applications submitted by mail shall be considered timely filed if postmarked not later than September 15 for the November examination and March 15 for the May examination. If the filing date falls on a Saturday, Sunday or federal holiday, the application shall be considered timely filed if postmarked or received in the Board office on the next business day. Only a postmark affixed by the United States Postal Service shall be considered the postmark. The Board may require the submission of photo identification, fingerprints, or other identification information with the application as deemed necessary to insure the integrity of the exam administration; and

(5) examination fees shall be set by the Board and must accompany the application. The fee shall not exceed eighty ($80.00) dollars for each section in which the candidate is examined. If a check in payment of examination fees fails to clear the bank, the application shall be deemed incomplete and the application shall be returned to the candidate; and

(6) in order to pass the examination, the applicant must receive a grade of seventy-five (75) or higher on the following subjects:

(a) Financial Accounting and Reporting - Business Enterprises; and

(b) Accounting and Reporting - Taxation, Managerial, Governmental and Not-for-Profit Organizations; and

(7) if an applicant receives a passing grade in either of the two (2) required examination subjects, the applicant shall be entitled to receive conditional credit for the subject passed and to be re-examined in the subject not passed during the next three (3) consecutive examinations. An applicant shall be required to sit for both sections of the examination unless the applicant has received conditional credit for passing one (1) of the subjects; and

(8) examination credits received as an applicant of the Accounting Practitioner license shall not be transferable for licensing as a Certified Public Accountant.

1-16. Accounting Practitioners; Application Fee and Initial License Fee; Annual License Fee; Continuing Professional Education.

A. The application fee for an applicant qualifying for an Accounting Practitioner license by examination shall be twenty ($20.00) dollars, payable at the time of applying for the initial license after passing the examination.

B. The application fee for an applicant qualifying for an Accounting Practitioner license by education or surrender of the applicant's Certified Public Accountant license or Public Accountant license shall be fifty ($50.00) dollars payable at the time of applying for the initial license.

C. The provisions of Regulation 1-11 regarding annual license fees shall be applicable to any person who holds an Accounting Practitioner license.

D. The provisions of Regulation 1-17 regarding continuing professional education requirement shall be applicable to any person who holds an Accounting Practitioner license.

1-17. Continuing Professional Education Requirement.

A. Applicability.

(1) The continuing professional education requirement applies to all Certified Public Accountants, Public Accountants, or Accounting Practitioners who hold Certificates of Registration or licenses issued by the South Carolina Board of Accountancy. Each licensee is responsible for selecting continuing professional education which contributes directly to his or her professional competence. When judging a licensee's competence to undertake an engagement under Regulation 1-19A, the continuing professional education taken shall be one (1) factor considered.

(2) The continuing professional education requirement may be waived in individual cases upon application to and approval by the Board:

(a) the licensee is not engaged in the practice of public accountancy within the State to any degree and does not perform for compensation any services normally performed by Certified Public Accountants, Public Accountants, or Accounting Practitioners (including preparation of tax returns) whether or not a license is required to perform such services; or

(b) the licensee has attained the age of seventy-two (72) years; or

(c) the licensee has been prevented from compliance because of illness or mental or physical disability as certified by a medical doctor; or

(d) other good cause exists.

(3) Any waiver granted because the licensee is not engaged in the public practice of accounting shall be rescinded at such time as a licensee re-enters the practice of public accountancy in this State. Upon re-entry to practice, the licensee shall make a written application to the Board and provide proof that he has obtained forty (40) hours of continuing professional education for each year that waiver was granted, not to exceed a total of one hundred twenty (120) hours. The hours submitted to the Board shall include not more than twenty (20%) percent in personal development courses.

B. Hours Required.

(1) Each person to whom the continuing professional education requirement applies shall complete forty (40) hours of acceptable continuing professional education each calendar year as a condition of obtaining a renewal license for the licensing period beginning July 1 of the following year. Not more than twenty (20%) percent of the required hours may be in personal development subjects.

(2) A person who obtains a Certificate of Registration or license for the first time shall complete at least forty (40) hours of acceptable continuing education during the calendar year following the year in which the original certificate or license was obtained.

C. Calculation of Hours of Credit.

(1) The following standards shall be used to measure the hours of credit to be given for acceptable professional education:

(a) one (1) hour of credit shall be granted for each fifty (50) minutes of actual instructional contract time, exclusive of introductions, announcements, intermissions, or other activity which may be part of the program; and

(b) in order to qualify, a program must be at least one (1) hour (fifty-minute period) in length; and

(c) only class hours, actual hours of attendance, or the equivalent (and not student hours devoted to preparation) shall be counted; and

(d) credit for formal correspondence or other individual study programs shall be computed at the rate of one (1) hour credit for each two (2) hours of completion time as estimated by the sponsor.

(2) The sponsor's recommendation for hours of credit shall be accepted subject to verification by the Board as provided in Section 1-17F of this regulation.

D. Programs Which Qualify.

(1) The overriding consideration in determining whether a specific program qualifies as acceptable continuing professional education is that it be a formal program of learning which contributes directly to the professional competence of a licensee.

(2) Continuing professional education programs shall qualify if:

(a) the program is conducted by persons whose background, training, education, and experience qualify them as appropriate instructors, discussion leaders, or lecturers in the subject matter of the particular program; and

(b) an outline of the program presented is prepared in advance and preserved by the sponsor; and

(c) the program is at least one (1) hour (fifty-minute period) in length; and

(d) a record of registration or attendance is maintained by the sponsor; and

(e) evidence of satisfactory completion is furnished to each participant by the sponsor. At a minimum, the evidence of satisfactory completion shall show the sponsor's name and address, the name of the participant, the course title, the hours of credit by subject category, and the dates attended; and

(f) records showing compliance with items (a) through (e) above are preserved and maintained by the sponsor for a period of at least four (4) years from the date of presentation of the program.

(3) The following programs may qualify provided all other requirements of this regulation are met:

(a) professional development programs of recognized national and state accounting organizations; or

(b) technical sessions at meetings of recognized national and state accounting organizations and their chapters; or

(c) university or college credit courses. Each semester hour credit shall equal fifteen (15) hours toward the requirement. In the case of universities or colleges on the quarter system, each quarter hour credit shall equal ten (10) hours; or

(d) university or college non-credit courses. Each classroom hour shall equal one (1) qualifying hour; or

(e) formal organized in-firm and inter-firm education programs. Portions of each meeting devoted to administrative matters shall not be included; or

(f) programs offered by other recognized professional organizations, industrial or commercial firms, proprietary schools, or governmental entities; or

(g) formal correspondence or other individual study programs (including taped programs). Licensees claiming credit for such courses shall be required to obtain evidence of satisfactory completion of the course from the sponsor. Credit shall be allowed in the renewal period in which the course is completed. The Board shall not approve any program of learning that does not offer sufficient evidence that the work has actually been accomplished; or

(h) published articles and books provided they contribute to the professional competence of the licensee. The amount of credit so awarded shall be determined by the Board. Credit for preparation of such publications may be given on a self-declaration basis up to twenty-five (25%) percent of the renewal period requirement. In exceptional circumstances a licensee may request additional credit by submitting the article(s) or book(s) to the Board with an explanation of the circumstances which he believes justify a greater credit. Hours in excess of the limitation contained in this sub-paragraph shall not be available for carry-over of credit as provided in Section 1-17E of this regulation; or

(i) positive enforcement qualified reviewers assigned by the Board may be allowed continuing professional education credit of up to eight (8) hours per day, with a maximum of sixteen (16) hours for time actually spent reviewing reports. Credit shall be calculated in the manner provided in Section 1-17C of this regulation; or

(j) functioning as a lecturer or teacher in a continuing professional education program. For the initial offering credit shall be granted equal to twice the number of hours participation in the course. No additional credit shall be granted for subsequent offerings of the same course within a two-year period. Credit for service as a lecturer or teacher in a continuing professional education program shall be limited to fifty (50%) percent of the required hours for a reporting period and any excess shall not be available for carry-over of credit as provided for in Section 1-17E of this regulation; or

(k) teachers of university or college credit courses shall be granted credit at the rate of twenty (20) hours for each course subject taught. Credit shall not be granted for accounting principles, basic financial accounting, basic managerial accounting, or any other introductory accounting course. Credit shall not be granted for repetitious presentations within a two-year period. Credit for teaching college credit courses shall be limited to fifty (50%) percent of the required hours for a reporting period and any excess shall not be available for carry-over of credit as provided for in Section 1-17E of this regulation.

E. Carry-Over of Credit.

(1) When a licensee completes more than the required number of hours of continuing professional education in any calendar year, the extra hours, not in excess of twenty (20) hours, may be carried forward and treated as hours earned in the following year.

(2) Hours in excess of credit limited by provisions of Sections 1-17D(3)(h), 1-17D(3)(j), and 1-17D(3)(k) shall not be available for carry-over.

(3) Hours in personal development subjects that exceed twenty (20%) percent of the required hours shall not be available for carry-over of credit.

F. Controls and Reporting.

(1) On or before the last day of February of each year, each applicant for re-licensing shall submit a statement to the Board, signed under penalty of perjury, containing the following information pertaining to the educational programs he has completed:

(a) sponsoring organization; and

(b) location of program; and

(c) title of course or description of content; and

(d) principal instructor; and

(e) dates attended; and

(f) hours attended.

(2) Documentation of satisfactory completion must be attached for self-study courses.

(3) If the applicant for re-licensing is a non-resident of South Carolina and is required to submit similar information to the Accountancy Board of his or her home state, the Board, if it determines the continuing professional education requirements of the home state are substantially equivalent to those of South Carolina, may accept a statement of compliance with home state requirements, signed under penalty of perjury, in lieu of the full South Carolina report.

(a) The Board may require such other information as it deems necessary to determine the acceptability of a program or course for the purpose of the continuing professional education requirements or for the administration of this regulation.

(b) The Board, in its discretion, may verify the information submitted by licensees.

(c) In all cases, the responsibility for establishing that a particular program or course is acceptable and meets the continuing professional education requirements rests solely with the individual applicant for license renewal.

(d) Evidence to support fulfillment of the requirements must be retained by the licensee for at least three (3) years from the due date of the continuing professional education report or the date filed, whichever is later.

G. Penalties for Non-Compliance.

(1) Failure to complete the continuing professional education requirements by December 31 shall cause the imposition of a penalty of fifty ($50.00) dollars, which the Board, in its discretion, may waive for just cause.

(2) Failure to submit the report of continuing professional education, as set forth in Section 1-17F(1) above, by the last day of February of each year shall cause the imposition of a penalty for late filing in the amount of fifty ($50.00) dollars for each month, or fraction thereof, that the report is delinquent up to a maximum late filing penalty of two hundred fifty ($250.00) dollars. The Board, in its discretion, may waive the penalty for just cause.

(3) In the event a licensee has not filed an acceptable continuing education report by July 1, he shall be notified by certified mail to his last known address that his Certificate of Registration or his license for the period beginning July 1 cannot be renewed.

1-18. Independence; Integrity and Objectivity.

A. Independence. A licensee or a firm of which he is an owner shall not express an opinion or issue a review report on financial statements of an enterprise unless he and his firm are independent with respect to such enterprise. Independence will be considered to be impaired if, for example:

(1) during the period of his professional engagement, or at the time of expressing his opinion or issuing a review report, he or his firm:

(a) had or was committed to acquire any direct or material indirect financial interest in the enterprise; or

(b) had any jointly closely held business investment with the enterprise or any officer, director, or principal stock holder thereof which was material in relation to his or his firm's net worth; or

(c) had any loan to or from the enterprise or any officer, director, or principal stockholder thereof. This latter restriction does not apply to the following loans from a financial institution when made under normal lending procedures, terms, and requirements:

(i) loans obtained by a licensee or his firm which are not material in relation to the net worth of such borrower; or

(ii) home mortgages; or

(iii) other secured loans, except loans guaranteed by a licensee's firm which are otherwise unsecured.

(2) During the period covered by the financial statements, during the period of the professional engagement or at the time of expressing an opinion or issuing a review report, he or his firm:

(a) was connected with the enterprise as a promoter, underwriter, or voting trustee, a director or officer or in any capacity equivalent to that of a member of management or of an employee; or

(b) was a trustee of any trust or executor or administrator of any estate if such trust or estate had a direct or material indirect financial interest in the enterprise; or was a trustee for any pension or profit-sharing trust of the enterprise.

The above examples are not intended to be all-inclusive.

(3) In any instance in which a licensee's name is associated with financial statements, if he is not independent, such lack of independence shall be disclosed.

B. Integrity and Objectivity. In the performance of any professional service, a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others.

In tax practice, a licensee may resolve doubt in favor of his client as long as there is reasonable support for his position.

1-19. Competency and Technical Standards.

A. Competence. A licensee shall not undertake any engagement for the performance of professional services which he cannot reasonably expect to complete with due professional competence, including compliance, where applicable, with B, C, and D below.

B. Auditing Standards. A licensee shall not permit his name to be associated with financial statements in such a manner as to imply that he is acting as an independent public accountant with respect to such financial statements unless he has complied with the applicable generally accepted auditing standards. Statements on Auditing Standards issued by the American Institute of Certified Public Accountants, Standards for Audit of Government Organizations, Programs, Activities and Functions issued by the United States General Accounting Office, and other pronouncements, having similar generally recognized authority, are considered to be interpretations of the generally accepted auditing standards, and departures from such pronouncements, where they are applicable, must be justified by those who do not follow them.

C. Accounting Principles. A licensee shall not issue a report asserting that financial statements are presented in conformity with generally accepted accounting principles if such financial statements contain any departure from such accounting principles which has a material effect on the statements taken as a whole, unless the licensee can demonstrate that by reason of unusual circumstances the financial statements would otherwise have been misleading. In such a case, the licensee's report must describe the departure, the approximate effects thereof, if practicable, and the reasons why compliance with the principle would result in a misleading statement. For purposes of this rule, generally accepted accounting principles are considered to be defined by pronouncements issued by the Financial Accounting Standards Board and its predecessor entities, the Government Accounting Standards Board, and similar pronouncements issued by other entities having similar generally recognized authority.

D. Other Professional Standards. A licensee, in the performance of attestation engagements, management advisory services, tax services, or accounting and review services, shall conform to the professional standards applicable to such services. For purposes of this rule, such professional standards are considered to be defined by Statements on Standards for Attestation Engagements, Statements on Management Advisory Services, Statements on Tax Practice, and Statements on Standards for Accounting and Review Services, respectively, in each instance issued by the American Institute of Certified Public Accountants, and by similar pronouncements by other entities having generally recognized authority.

1-20. Responsibilities to Clients.

A. Confidential Client Information. A licensee shall not disclose any confidential information obtained in the course of a professional engagement except with the consent of the client.

This Regulation shall not be construed:

(1) to relieve a licensee of his obligation under Regulations 1-19B and 1-19C; or

(2) to affect in any way his compliance with a validly issued subpoena or summons enforceable by order of a court; or

(3) to prohibit review of a licensee's professional practices as a part of voluntary quality review under appropriate authorization; or

(4) to preclude a licensee from responding to any inquiry made by the ethics division, trial board, or duly constituted investigative or disciplinary body of a national professional association or state professional society, or under state statutes.

B. Contingent Fees.

(1) A licensee shall not:

(a) perform for a contingent fee any professional services for, or receive such fee from a client for whom the licensee or the licensee's firm performs:

(i) an audit or review of a financial statement; or

(ii) a compilation of a financial statement when the licensee expects, or reasonably might expect, that a third party will use the financial statement and the licensee's compilation report does not disclose a lack of independence; or

(iii) an examination of prospective financial information; or

(b) prepare an original or amended tax return or claim for a tax refund for a contingent fee for any client.

(2) Disclosure of permitted contingent fees. A licensee who is not prohibited by this regulation from performing services for or receiving contingent fees may charge a contingency fee for performing services if the client and the licensee enter into a separate written contract, executed by both parties, specifying the terms of the contingency fee for each transaction to be conducted. No contingency fee is payable or enforceable in the absence of a clearly executed written contract.

(3) The prohibition in (1) above applies during the period in which the licensee or the licensee's firm is engaged to perform any of the services listed above and the period covered by any historical financial statements involved in any such listed services.

(4) Except as stated below, a contingent fee is a fee established for the performance of any service pursuant to an arrangement in which no fee will be charged unless a specified finding or result is attained, or in which the amount of the fee is otherwise dependent upon the finding or result of such service. Solely for purposes of this regulation, fees are not regarded as being contingent if fixed by courts or other public authorities, or, in tax matters, if determined based on the results of judicial proceedings or the findings of governmental agencies.

(5) Preparation of an original or amended tax return or claim for tax refund includes giving advice on events which have occurred at the time the advice is given, if such advice is directly relevant to determining the existence, character, or amount of a schedule, entry, or other portion of a return or claim for refund.

(6) A fee is considered determined based on the findings of governmental agencies if the licensee can demonstrate a reasonable expectation, at the time of a fee arrangement, of substantive consideration by an agency with respect to the licensee's client. Such an expectation is deemed not reasonable in the case of preparation of original tax returns.

(7) A licensee's fees may vary depending, for example, on the complexity of services rendered.

1-21. Other Responsibilities and Practices.

A. Acts Discreditable. A licensee shall not commit an act discreditable to the profession.

B. Solicitation and Advertising. A licensee shall not seek to obtain clients by advertising or other forms of solicitation in a manner that is false, misleading, deceptive, or tends to promote unsupported claims. Such activities include those that:

(1) create false or unjustified expectations of favorable results; or

(2) imply the ability to influence any court, tribunal, regulatory agency, or similar body or official; or

(3) consist of statements that are self-laudatory and that are not based on verifiable facts; or

(4) make incomplete comparisons with other licensees; or

(5) contain any other representations that would be likely to cause a reasonable person to misunderstand or be deceived; or

(6) consist of the use of coercion, duress, compulsion, intimidation, or vexatious or harassing conduct.

C. Commissions and Referral Fees.

(1) Prohibited Commissions. A licensee shall not for a commission recommend or refer to a client any product or service, or for a commission recommend or refer any product or service to be supplied by a client, or receive a commission, when the license or the licensee's firm also performs for that client:

(a) an audit or review of a financial statement; or

(b) a compilation of a financial statement when the licensee expects, or reasonably might expect, that a third party will use the financial statement and the licensee's compilation report does not disclose a lack of independence; or

(c) an examination of prospective financial information.

This prohibition applies during the period in which the licensee is engaged to perform any of the services listed above and the period covered by any historical financial statements involved in such listed services.

(2) Disclosure of Permitted Commissions. A licensee who is not prohibited by this regulation from performing services for or receiving a commission may charge a commission for performing services if the client and the licensee enter into a separate written contract, executed by both parties, specifying the terms of the commission for each transaction to be conducted. No commission is payable or enforceable in the absence of a clearly executed written contract.

(3) Referral Fees. Any licensee who accepts a referral fee for recommending or referring any service of a Certified Public Accountant, Public Accountant, or Accounting Practitioner to any person or entity or who pays a referral fee to obtain a client shall disclose such acceptance or payment to the client in writing.

(4) This regulation shall not prohibit payments for the purchase of an accounting practice or retirement payments to individuals formerly engaged in the practice of public accounting or payments to their heirs or estates.

D. Form of Practice and Ownership and Practice Limitations.

(1) A licensee shall practice public accounting, whether as an owner or employee, only in an entity organized in accordance with applicable South Carolina law as a proprietorship, partnership, limited liability partnership, limited liability company or professional corporation or association.

(2) Ownership and Practice Limitations of Certified Public Accounting Firms. The characteristics of ownership of Certified Public Accountant entities (firms) and practice limitations shall be:

(a) A super majority sixty six and two thirds (66 2/3%) percent of the ownership of the firm in terms of financial interests and voting rights must belong to Certified Public Accountants. The non-Certified Public Accountant owner shall be actively engaged as a firm member in providing services to the firm's clients as his or her principal occupation. Ownership by investors or commercial enterprises is prohibited.

(b) There must be a Certified Public Accountant or group of Certified Public Accountants who has ultimate responsibility for all the services provided by the firm and by each business unit (geographic or functional) performing financial statement attest, review, or compilation services and other engagements governed by the American Institute of Certified Public Accountants (AICPA) Statements on Auditing Standards or Statements on Standards for Accounting and Review Services. At least one (1) managing owner and every resident manager in charge of an office in South Carolina must be a Certified Public Accountant in this State.

(c) Non-Certified Public Accountant owners shall not assume ultimate responsibility for any financial statement attest or compilation engagement.

(d) Non-Certified Public Accountant owners shall possess a baccalaureate degree and, beginning in the year 2010, have obtained one hundred fifty (150) semester hours of education at an accredited college or university.

(e) Non-Certified Public Accountant owners will be permitted to use the title "principal," "partner," "owner," "officer," "member" or "shareholder," but not hold themselves out to be Certified Public Accountants.

(f) Non-Certified Public Accountant owners shall abide by this Code of Professional Ethics.

(g) Non-Certified Public Accountant owners shall complete the same work-related continuing professional education requirements as set forth in Section 40-2-380 and Regulation 1-17.

(h) Owners shall at all times maintain ownership equity in their own right and shall be the beneficial owners of the equity capital ascribed to them. Provision shall be made for the ownership to be transferred to the firm or to other qualified owners if the non-Certified Public Accountant ceases to be actively engaged in the firm.

(3) Ownership and Practice Limitations of Firms of Public Accountants. The characteristics of ownership of Public Accountant entities (firms) and practice limitations shall be:

(a) A super majority sixty six and two thirds (66 2/3%) percent of the ownership of the firm in terms of financial interests and voting rights must belong to Public Accountants (PAs) or Certified Public Accountants (CPAs). Owners who are not PAs or CPAs shall be actively engaged as a firm member in providing services to the firm's clients as his or her principal occupation. Ownership by investors or commercial enterprises is prohibited.

(b) There must be a Public Accountant, CPA, or group of Public Accountants or CPAs who has ultimate responsibility for all the services provide by the firm and by each business unit (geographic or functional) performing financial statement attest, review, or compilation services and other engagements governed by the American Institute of Certified Public Accountants (AICPA) Statements on Auditing Standards or Statements on Standards for Accounting and Review Services. At least one (1) managing owner and every resident manager in charge of an office in South Carolina must be a Public Accountant or CPA in this State.

(c) Owners who are not PAs or CPAs shall not assume ultimate responsibility for any financial statement attest or compilation engagement.

(d) Owners who are not PAs or CPAs shall possess a baccalaureate degree and, beginning in the year 2010, have obtained one hundred fifty (150) semester hours of education at an accredited college or university.

(e) Owners who are not PAs or CPAs will be permitted to use the title "principal," "partner," "owner," "officer," "member" or "shareholder," but not hold themselves out to be Public Accountants (or PAs).

(f) Owners who are not PAs or CPAs shall abide by this Code of Professional Ethics.

(g) Owners who are not PAs or CPAs shall complete the same work-related continual professional education requirements as set forth in Section 40-2-380 and Regulation 1-17.

(4) Ownership and Practice Limitations of Accounting Practitioner Firms. The characteristics of ownership of Accounting Practitioner entities (firms) and practice limitations shall be:

(a) A super majority sixty six and two thirds (66 2/3%) percent of the ownership of the firm in terms of financial interests and voting rights must belong to Accounting Practitioners, Certified Public Accountants (CPAs) or Public Accountants (PAs). Owners who are not Accounting Practitioners, CPAs or PAs shall be actively engaged as a firm member in providing services to the firm's clients as his or her principal occupation. Ownership by investors or commercial enterprises is prohibited.

(b) There must be an Accounting Practitioner, CPA or PA or group of Accounting Practitioners, CPAs or PAs who has ultimate responsibility for all the services provide by the firm and by each business unit (geographic or functional) performing compilation services. At least one (1) managing owner and every resident manager in charge of an office in South Carolina must be an Accounting Practitioner, CPA or PA in this State.

(c) Owners who are not Accounting Practitioners, CPAs or PAs shall not assume ultimate responsibility for any financial statement compilation engagement.

(d) Owners who are not Accounting Practitioners, CPAs or PAs shall be permitted to use the title "principal," "partner," "owner," "officer," "member" or "shareholder," but not hold themselves out of be Accounting Practitioners, CPAs or PAs.

(e) Owners who are not Accounting Practitioners, CPAs or PAs shall abide by this Code of Professional Ethics.

(f) Owners who are not Accounting Practitioners, CPAs or PAs shall complete the same work-related continuing professional education requirements as set forth in Section 40-2-380 and Regulation 1-17.

(g) Owners shall at all times maintain ownership equity in their own right and shall be the beneficial owners of the equity capital ascribed to them. Provision shall be made for the ownership to be transferred to the firm or to other qualified owners if the owner who is not an Accounting Practitioner, CPA or PA ceases to be actively engaged in the firm.

E. Firm Name. No licensee shall engage in a practice of public accountancy using a professional or firm name or designation that is fictitious, or that is misleading about the form of the firm, or that is misleading about any other matter, provided, however, that names of one (1) or more former partners, members, or shareholders may be included in the name of a firm or its successor.

(1) A Certified Public Accountant firm shall not include the name or names of non-Certified Public Accountant owners.

(2) A Certified Public Accountant firm shall not include the name of a Public Accountant or Accounting Practitioner who may be an owner.

(3) The name of a firm of Public Accountants shall not contain the name of an Accounting Practitioner who may be an owner.

(4) The terms, "and associates" and "and company" shall be used in firm names only to refer to owners whose names are not otherwise identified or included in the firm name.

(5) The Board of Accountancy shall determine whether a name is misleading.