PART 22. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY
CHAPTER 501. RULES OF PROFESSIONAL CONDUCT
SUBCHAPTER A. GENERAL PROVISIONS
The Texas State Board of Public Accountancy (Board) proposes an amendment to §501.52 concerning Definitions.
Background, Justification and Summary
The amendment deletes the reference to a section of the Board's rules that no longer exists. A reference is not needed.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will eliminate confusion for those seeking to locate the referenced rule.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.52.Definitions.
The following words and terms, when used in title 22, part 22 of the Texas Administrative Code relating to the Texas State Board of Public Accountancy, shall have the following meanings, unless the context clearly indicates otherwise. The masculine shall be construed to include the feminine or neuter and vice versa, and the singular shall be construed to include the plural and vice versa.
(1) "Act" means the Public Accountancy Act, Chapter 901, Occupations Code;
(2) "Advertisement" means a message which is transmitted to persons by, or at the direction of, a person and which has reference to the availability of the person to perform Professional Accounting Services;
(3) "Affiliated entity" means an entity controlling or being controlled by or under common control with another entity, directly or indirectly, through one or more intermediaries;
(4) "Attest Service" means:
(A) an audit or other engagement required by the board to be performed in accordance with the auditing standards adopted by the AICPA, PCAOB, or another national or international accountancy organization recognized by the board;
(B) a review or compilation required by the board to be performed in accordance with standards for accounting and review services adopted by the AICPA or another national or international accountancy organization recognized by the board;
(C) an engagement required by the board to be performed in accordance with standards for attestation engagements adopted by the AICPA or another national or international accountancy organization recognized by the board; or
(D) any other assurance service required by the board to be performed in accordance with professional standards adopted by the AICPA or another national or international accountancy organization recognized by the board;
(5) "Board" means the Texas State Board of Public Accountancy;
(6) "Charitable Organization" means an organization which has been granted tax-exempt status under the Internal Revenue Code of 1986, §501(c), as amended;
(7) "Client" means a party who enters into an agreement with a license holder or a license holder's employer to receive a professional accounting service or professional accounting work;
(8) "Client Practice of Public Accountancy" is the offer to perform or the performance by a person for a client or a potential client of professional accounting services or professional accounting work, and also includes:
(A) the advice or recommendations in connection with the sale or offer for sale of products (including the design and implementation of computer software), when the advice or recommendations routinely require or imply the possession of accounting or auditing skills or expert knowledge in auditing or accounting; and
(B) the performance of litigation support services;
(9) "Commission" means compensation for recommending or referring any product or service to be supplied by another party;
(10) "Contingent fee" means a fee for any service where 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. However, a person's non-Contingent fees may vary depending, for example, on the complexity of the services rendered. Fees are not contingent if they are fixed by courts or governmental entities acting in a judicial or regulatory capacity, or in tax matters if determined based on the results of judicial proceedings or the findings of governmental agencies acting in a judicial or regulatory capacity, or if there is a reasonable expectation of substantive review by a taxing authority;
(11) "Financial Statements" means a presentation of financial data, including accompanying notes, derived from accounting records and intended to communicate an entity's economic resources or obligations at a point in time, or the changes therein for a period of time, in accordance with generally accepted accounting principles or other comprehensive basis of accounting. Incidental financial data to support recommendations to a client or in documents for which the reporting is governed by Statements on Standards for Attestation Engagements and tax returns and supporting schedules do not constitute financial statements for the purposes of this definition;
(12) "Firm" means a sole proprietorship, partnership, limited liability partnership, limited liability company, corporation or other legally recognized business entity engaged in the practice of public accountancy;
(13) "Good standing" means compliance by a licensee with the board's licensing rules, including the mandatory continuing education requirements, Peer Review, and payment of the annual license fee, and any penalties and other costs attached thereto. In the case of board-imposed disciplinary or administrative sanctions, the person must be in compliance with all the provisions of the board order to be considered in good standing;
(14) "Licensee" means the holder of a license issued by the board to a person pursuant to the Act, or pursuant to provisions of a prior Act;
(15) "Out of state practitioner and out of state firm" means a person licensed in another jurisdiction practicing in Texas pursuant to a practice privilege as provided for in §901.461 and §901.462 of the Act (relating to Practice by Certain Out-of-State Firms and Practice by Out-of-State Practitioner with Substantially Equivalent Qualifications);
(16) "Peer Review," "Quality Review" or "Compliance Assurance" means the study, appraisal, or review of the professional accounting work of a public accountancy firm that performs attest services by a certificate holder who is not affiliated with the firm;
(17) "Person" means an individual, sole proprietorship, partnership, limited liability partnership, limited liability company, corporation or other legally recognized business entity that provides or offers to provide professional accounting services or professional accounting work as defined in paragraph (22) of this section;
(18) "Principal office" means the location specified
by the client as the address to which a client practice of public
accounting service [described in §517.1(a)(2) of this
title (relating to Practice by Certain Out of State Firms)]
is directed and is synonymous with Home Office where it appears in
the Act;
(19) "Practice unit" means an office of a firm required to be licensed with the board for the purpose of the client practice of public accountancy;
(20) "Practice privilege" means the privilege for an out-of-state person to provide certain Professional Accounting Services or Professional Accounting Work in Texas to the extent permitted under Chapter 517 of this title (relating to Practice by Certain Out of State Firms and Individuals);
(21) "Preparation engagement" means the preparation of financial statements that do not include an audit, review or a compilation report on those financial statements in accordance with Standards for Accounting and Review Services adopted by the AICPA;
(22) "Professional Accounting Services" or "professional accounting work" means services or work that requires the specialized knowledge or skills associated with certified public accountants, including but not limited to:
(A) issuing reports on financial statement(s);
(B) preparation engagements pursuant to SSARS;
(C) providing management or financial advisory or consulting services;
(D) preparing tax returns;
(E) providing advice in tax matters;
(F) providing forensic accounting services;
(G) providing internal auditing services;
(H) accounting, auditing and other assurance services;
(I) providing litigation support services; and
(J) recommending the sale of a product if the recommendation requires or implies accounting or auditing skills.
(23) "Report" means an opinion, report, or other document, prepared in connection with an attest service that states or implies assurance as to the reliability of financial statement(s); and includes or is accompanied by a statement or implication that the person issuing the opinion, report, or other document has special knowledge or competence in accounting or auditing. A statement or implication of assurance as to the reliability of a financial statement or as to the special knowledge or competence of the person issuing the opinion, report, or other document includes any form of language that is conventionally understood to constitute such a statement or implication. A statement or implication of special knowledge or competence in accounting or auditing may arise from the use by the issuer of the opinion, report, or other document of a name or title indicating that the person is an accountant or auditor; or the language of the opinion, report, or other document itself.
(24) Interpretive Comment: The practice of public accountancy is defined in §901.003 of the Act (relating to the Practice of Public Accountancy).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500122
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §501.53 concerning Applicability of Rules of Professional Conduct.
Background, Justification and Summary
Licensees practicing through a practice privilege in this state must comply with all of the Board's rules of professional conduct. In addition, non-attest financials are not issued in accordance with accounting principles as they do not express and opinion and licensees not in the client practice of public accounting may issue non-attest transmittals without a firm license.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will: 1) make it clear that licensees practicing through a practice privilege in this state must comply with all of the Board's Rules of Professional Conduct; 2) eliminate the requirement that non-attest financial statements must comply with accounting principles; and 3) make it clear that licensees not in the client practice of public accounting may issue non-attest transmittals without a firm license.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.53.Applicability of Rules of Professional Conduct.
(a) All of the rules of professional conduct shall apply to and must be observed by a certificate or registration holder and any individual who holds a certificate of license as a CPA in another state and whose principal place of business is not in this state but offers or renders professional accounting services in this state pursuant to §901.462 of the Act (relating to Practice by Out-Of-State Practitioner with Substantially Equivalent Qualifications) engaged in the client practice of public accountancy.
[(b) No certificate or registration
holder shall issue, or otherwise be associated with, financial statements
that do not conform to the accounting principles described in §501.61
of this chapter (relating to Accounting Principles).]
(b) [(c)] Notwithstanding
subsection (a) of this section, the [The] following
rules of professional conduct shall be required of all licensees,
including licensees practicing pursuant to §901.462 of the Act
and certificate or registration holders [apply to and
be required to be observed by certificate or registration holders
when] not employed in the client practice of public accountancy:
(1) §501.63(b) of this chapter (relating to Reporting Standards);
(2) [(1)] §501.73 of this
chapter (relating to Integrity and Objectivity) when in an employer/employee relationship;
(3) [(2)] §501.74 of this
chapter (relating to Competence);
(4) [(3)] §501.77 of this
chapter (relating to Acting through Others);
(5) [(4)] §501.78 of this
chapter (relating to Withdrawal or Resignation);
(6) [(5)] §501.90 of this
chapter (relating to Discreditable Acts);
(7) [(6)] §501.91 of this
chapter (relating to Reportable Events);
(8) [(7)] §501.92 of this
chapter (relating to Frivolous Complaints);
(9) [(8)] §501.93 of this
chapter (relating to Responses); and
(10) [(9)] §501.94 of this
chapter (relating to Mandatory Continuing Professional Education).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500123
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §501.55 concerning Definition of Acronyms.
Background, Justification and Summary
Government Auditing Standards is more accurately referred to as Generally Accepted Government Auditing Standards and that is added to the current acronym and TSBPA is added to the acronym in our rules.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will clarify that the correct reference to Government Auditing Standards is more properly referenced as Generally Accepted, and so that the public will understand that TSBPA represents in the Board rules the name of this agency which is Texas State Board of Public Accountancy.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.55.Definition of Acronyms.
The following acronyms, when used in Title 22, Part 22 of the Texas Administrative Code relating to the Texas State Board of Public Accountancy, shall have the following meanings:
(1) "AICPA" means the American Institute of Certified Public Accountants;
(2) "CPA" means Certified Public Accountant;
(3) "CPE" means continuing professional education;
(4) "FASB" means the Financial Accounting Standards Board;
(5) "GAAP" means Generally Accepted Accounting Principles;
(6) "GAAS" means Generally Accepted Auditing Standards;
(7) "GAGAS" means Generally Accepted Government Auditing Standards;
(8) "GASB" means the Governmental Accounting Standards Board;
(9) "IASB" means the International Accounting Standards Board;
(10) "IESB" means the International Ethics Standards Board;
(11) "IFRB" means International Financial Reporting Bulletins;
(12) "IFRS" means International Financial Reporting Standards;
(13) "IRS" means the Internal Revenue Service;
(14) "NASBA" means the National Association of State Boards of Accountancy;
(15) "NPRC" means the National Peer Review Committee;
(16) "PCAOB" means the Public Company Accounting Oversight Board;
(17) "SAS" means Statements on Auditing Standards;
(18) "SEC" means the United States Securities and Exchange Commission;
(19) "SOAH" means the State Office of Administrative Hearings;
(20) "SSAE" means Statements on Standards for Attestation Engagements;
(21) "SSARS" means Statements on Standards for Accounting and Review Services;
(22) "SSCS" means Statements on Standards for Consulting Services;
(23) "SSTS" means Statements on Standards for Tax Services;
(24) "TSBPA" means Texas State Board of Public Accountancy;
(25) [(24)] "TXCPA" means the
Texas Society of Certified Public Accountants;
(26) [(25)] "UAA" means the Uniform
Accountancy Act;
(27) [(26)] "UCPAE" means the
Uniform Certified Public Accountant Examination;
(28) [(27)] "U.S. GAO" means
the United States Government Accountability Office; and
(29) [(28)] "U.S. IQAB" means
the United States International Qualifications Appraisal Board.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500124
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §501.60 concerning Auditing Standards.
Background, Justification and Summary
Auditing standards of the Public Company Accounting Oversight Board (PCAOB) also includes PCAOB rules.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will make it clear that this agency expects licensees to comply with PCAOB rules or be subject to disciplinary action.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.60.Auditing Standards.
A person shall not permit his name to be associated with financial statements in such a manner as to imply that he is acting as an auditor with respect to such financial statements, unless he has complied with GAAS. Each of the following are considered to be sources of GAAS:
(1) SAS issued by the AICPA;
(2) auditing standards included in Standards for Audit of Government Organizations, Programs, Activities and Functions issued by the U.S. GAO;
(3) auditing and related professional practice standards and rules to be used by registered public accounting firms issued by the PCAOB; as well as,
(4) other pronouncements having similar generally recognized authority.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500125
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §501.63 concerning Reporting Standards.
Background, Justification and Summary
Peer review does not apply to preparation engagements even though it is a very limited attest service.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will make it clear that preparation engagements are not subject to peer review.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.63.Reporting Standards.
(a) A licensee in the client practice of public accountancy must comply with SSARS or another similar standard of a national or international accountancy organization recognized by the board when transmitting a client's financial statements to the client or a third party.
(b) A licensee not employed in the client practice of public accountancy may prepare his employer's financial statements and may issue non-attest transmittals or information regarding non-attest transmittals without a firm license, provided those transmittals do not purport to be in compliance with SSARS or any other similar standard of a national or international accountancy organization recognized by the board.
(c) A licensee performing a preparation engagement is not required to enroll in peer review.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500126
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes new rule §501.79 concerning Transfer or Return of Files Resulting from the Sale, Transfer, Discontinuation or Acquisition of Practice.
Background, Justification and Summary
A licensee that sells its' client's files must notify the client of the change in firms when the licensee continues to practice with the new firm. A licensee who sell his firm's client files must obtain permission of the client prior to the transfer of the client files when the licensee does not work with the new firm as an employee or owner. A licensee that discontinues his practice must maintain the confidentiality of the client files and arrange for the return of the client files to the client when requested.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed new rule is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule will help the public understand that the licensee is responsible for communicating the closing of the firm and the protection of the confidentiality of the firm's files, obtaining the client's permission prior to the transfer of the firm's files to a new firm when the licensee transfers the firm's files to the licensee's new firm.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the new rule and a Local Employment Impact Statement is not required because the proposed new rule will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed new rule will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the new rule does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the new rule is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed new rule.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed new rule will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The new rule is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed new rule.
§501.79.Transfer or Return of Files Resulting from the Sale, Transfer, Discontinuation or Acquisition of Practice.
(a) A licensee or licensee's firm that sells or transfers all or part of the licensee's practice to another person, firm, or entity, and is employed by the firm or retains ownership in the firm, is required to notify the clients of the change in ownership within 30 days of the sale or transfer.
(b) A licensee or licensee's firm that sells or transfers all or part of the licensee's practice to another person, firm, or entity and will no longer be employed by or retain any ownership in the practice is required to:
(1) submit a written request to each client subject to the sale or transfer, requesting the client's consent to transfer its files to the successor firm. The licensee should not transfer any client files to the successor firm until the client's consent is obtained. The licensee is required to retain evidence of consent for at least five years from the date of sale or transfer of the firm;
(2) arrange to return any client records, not transferred to the new firm, unless the licensee and client agree to some other arrangement; and
(3) retain in a confidential manner, client files where the licensee is unable to contact the client, for at least five years from the sale or transfer. When practicing before the IRS or other taxing authorities or regulatory bodies, licensees should ensure compliance with the most restrictive retention requirements.
(c) A licensee who discontinues his or her practice but does not sell or transfer the practice to a successor firm, is required within 30 days of the discontinuation of the practice to:
(1) Notify each client in writing of the discontinuation of the practice. The licensee must retain evidence of notification made to clients for at least five years. The licensee is not required to provide notification to former clients of the firm.
(2) Return any client records that the licensee is required to provide to the client, unless the licensee and client agree to some other arrangement.
(3) Retain in a confidential manner, client files where the licensee is unable to contact the client, for at least five years from the discontinuation of the practice. When practicing before the IRS or other taxing authorities or regulatory bodies, licensees should ensure compliance with any retention requirements that are more restrictive.
(d) A licensee who acquires all or part of a practice from another person, firm, or entity (predecessor firm) should be satisfied that all clients of the predecessor firm subject to the acquisition have consented to the licensee's continuation of professional services and retention of any client files or records the successor firm retains.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500127
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §501.81 concerning Firm Licensing.
Background, Justification and Summary
A licensee may provide non-attest accounting services through a non-licensed firm and use the CPA credential in association with the firm but must include the notice that the firm is not a CPA firm and the firm is not regulated by Board each time the licensee uses the CPA credential.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will make clear of the licensee's responsibility to disclose to the public when they are providing non-attest accounting services through a non-CPA firm not regulated by the Board.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.81.Firm Licensing.
(a) A firm, may not provide or offer to provide attest services or use the title "CPA," "CPAs," "CPA Firm," "Certified Public Accountants," "Certified Public Accounting Firm," or "Auditing Firm" or any variation of those titles unless the firm holds a firm license issued by the board or qualifies under a practice privilege. A firm license is not valid for any date or for any period prior to the date it is issued by the board and it automatically expires and is no longer valid after the end of the period for which it is issued. A firm license does not expire when the application for license renewal is received by the board prior to its expiration date. An expiration date for a firm license may be extended by the board, in its sole discretion, upon a demonstration of extenuating circumstances that prevented the firm from timely applying for or renewing a firm license.
(b) A firm is required to hold a license issued by the board if the firm establishes or maintains an office in this state.
(c) Each advertisement or written promotional statement that refers to a CPA's designation and his or her association with an unlicensed entity in the client practice of public accountancy must include the disclaimer: "This firm is not a CPA firm and these services are not regulated by the Texas State Board of Public Accountancy." The disclaimer must be included in conspicuous proximity to the name of the unlicensed entity and be printed in a size at least equal to, and a type not less bold than that contained in the body of the advertisement or written statement. If the advertisement is in audio format only, the disclaimer shall be clearly declared at the conclusion of each such presentation.
(d) The requirements of subsection (c) of this section do not apply with regard to a person performing services:
(1) as a licensed attorney at law of this state while in the practice of law or as an employee of a licensed attorney when acting within the scope of the attorney's practice of law;
(2) as an employee, officer, or director of a federally-insured depository institution, when lawfully acting within the scope of the legally permitted activities of the institution's trust department; or
(3) pursuant to a practice privilege.
(e) On the determination by the board that a person has practiced without a license or through an unlicensed firm in violation of subsection (c) of this section, the person's certificate shall be subject to revocation and may not be reinstated for at least 12 months from the date of the revocation.
(f) Interpretive Comment: A person who is employed by an unlicensed firm that offers services that fall within the definitions of the client practice of public accountancy as defined in §501.52(8) and (22) of this chapter (relating to Definitions) and §901.003 of the Act (relating to Practice of Public Accountancy) must comply with the disclaimer requirement found in subsection (c) of this section.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500128
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §501.90 concerning Discreditable Acts.
Background, Justification and Summary
The current rules identify acts that the Board may consider discreditable and subject to disciplinary action. The rule also states that there could be additional acts that the Board may find discreditable. The rule is being revised to only include acts that it has identified. The practice has been to hold licensees accountable for only those acts identified. The licensee should have the right to know what behavior the Board believes is unacceptable and thus sanctionable.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will be greater clarity for licensees to know what may be considered a discreditable act.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.90.Discreditable Acts.
A discreditable act evidences a lack of integrity and
reflects adversely on that person's fitness to engage in the practice
of public accountancy. [A person shall not commit any act
that reflects adversely on that person's fitness to engage in the
practice of public accountancy.] The [A discreditable
act includes but is not limited to and the] board may discipline
a person for the following discreditable acts:
(1) fraud or deceit in obtaining a certificate as a CPA or in obtaining registration under the Act or in obtaining a license to practice public accounting;
(2) dishonesty, fraud or gross negligence in the practice of public accountancy;
(3) violation of any of the provisions of Subchapter J or §901.458 of the Act (relating to Loss of Independence) applicable to a person certified or registered by the board;
(4) final conviction of a felony or imposition of deferred adjudication or community supervision in connection with a criminal prosecution of a felony under the laws of any state or the United States;
(5) final conviction of any crime or imposition of deferred adjudication or community supervision in connection with a criminal prosecution, an element of which is dishonesty or fraud under the laws of any state or the United States, a criminal prosecution for a crime of moral turpitude, a criminal prosecution involving alcohol abuse or controlled substances, or a criminal prosecution for a crime involving physical harm or the threat of physical harm;
(6) a revocation, cancellation, placement on probation, limitation on the scope of practice, or suspension by another state, or a refusal of renewal by another state, of the authority issued by that state to the person, or to the person's partner, member, or shareholder, to engage in the practice of public accountancy for a reason other than the failure to pay the appropriate authorization fee;
(7) suspension or revocation of or any consent decree concerning the right to practice before any state or federal regulatory or licensing body for a cause which in the opinion of the board warrants its action;
(8) a final finding of conduct by state or federal courts of competent jurisdiction, agencies, boards, local governments or commissions for violations of state or federal laws or rules or findings of unethical conduct by licensees that engage in activities regulated by entities including but not limited to: the Public Company Accounting Oversight Board, Internal Revenue Service, U.S. Securities and Exchange Commission, U.S. Department of Labor, U.S. General Accounting Office, U.S. Housing and Urban Development, Texas State Auditor, Texas Comptroller of Public Accounts, Texas Securities Board, Texas Department of Insurance, and the Texas Secretary of State;
(9) knowingly participating in the preparation of a false or misleading financial statement or tax return;
(10) fiscal dishonesty or breach of fiduciary responsibility of any type;
(11) failure to comply with a final order of any state or federal court;
(12) repeated failure to respond to a client's inquiry within a reasonable time without good cause;
(13) intentionally misrepresenting facts or making a misleading or deceitful statement to a client, the board, board staff or any person acting on behalf of the board;
(14) giving intentional false sworn testimony or perjury in court or in connection with discovery in a court proceeding or in any communication to the board or any other federal or state regulatory or licensing body;
(15) threats of bodily harm or retribution to a client;
(16) public allegations of a lack of mental capacity of a client which cannot be supported in fact;
(17) voluntarily disclosing information communicated to the person by an employer, past or present, or through the person's employment in connection with accounting services rendered to the employer, except:
(A) by permission of the employer;
(B) pursuant to the Government Code, Chapter 554 (commonly referred to as the "Whistle Blowers Act");
(C) pursuant to:
(i) a court order signed by a judge;
(ii) a summons under the provisions of:
(I) the Internal Revenue Code of 1986 and its subsequent amendments;
(II) the Securities Act of 1933 (15 U.S.C. §77a et seq.) and its subsequent amendments; or
(III) the Securities Exchange Act of 1934 (15 U.S.C. §78a et seq.) and its subsequent amendments;
(iii) a congressional or grand jury subpoena; or
(iv) applicable federal laws, federal government regulations, including requirements of the PCAOB;
(D) in an investigation or proceeding by the board;
(E) in an ethical investigation conducted by a professional organization of CPAs;
(F) in the course of a peer review under §901.159 of the Act (relating to Peer Review); or
(G) any information that is required to be disclosed by the professional standards for reporting on the examination of a financial statement.
(18) breaching the terms of an agreed consent order entered by the board or violating any Board Order.
(19) Interpretive Comment: The board has found in §519.7 of this title (relating to Criminal Offenses that May Subject a Licensee or Certificate Holder to Discipline or Disqualify a Person from Receiving a License) and §525.1 of this title (relating to Applications for the UCPAE, Issuance of the CPA Certificate, or Initial License) that any crime of moral turpitude directly relates to the practice of public accountancy. A crime of moral turpitude is defined in this chapter as a crime involving grave infringement of the moral sentiment of the community. The board has found in §519.7 of this title that any crime involving alcohol abuse or controlled substances directly relates to the practice of public accountancy.
(20) Interpretive comment: A conviction or final finding of unethical conduct by a competent authority, for the purpose of paragraph (8) of this subsection, includes any right to practice before the authority or findings that limit the scope of the permit or license conveyed by the authority. Conviction relates to the finding in a criminal proceeding and final finding relates to a determination in a non-criminal proceeding. Unethical conduct or activities are determined by the governmental entity making the determination of a conviction or final finding.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500129
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §501.93 concerning Responses.
Background, Justification and Summary
The rule is being updated to recognize email communications with the Board in addition to postal service mail.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will recognize the acceptance and wide-spread use of email communications with this agency.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§501.93.Responses.
(a) A person shall substantively respond in writing,
within 30 days or less as specified by the board, to any communication
from the board requesting a response. It is not a substantive response
for a person to simply reply that they do not intend to respond or
provide the records or documents requested. The time to respond shall
commence on the date that the earliest communication
was mailed or emailed to the last known mailing or
email address of the person, according to the board's records [address furnished to the board by the
person].
(b) When requested, and at no expense to the board, the written response shall include:
(1) copies of the person's documentation, reports and/or work papers related to issues in a complaint investigation; and
(2) copies of documents and reports or access to documents and reports related to the issues in a complaint investigation of the person's professional accounting work or ethical issues conducted by state and federal regulatory bodies and professional organizations, that the board may determine is related to the board's investigation.
(c) Failure to timely respond substantively to written communications, or failure to furnish requested documentation and/or work papers, constitutes conduct indicating lack of fitness to serve the public as a professional accountant.
(d) Each applicant and each person required to be registered with the board under the Act shall notify the board, either in writing or through the board's website, of any and all changes in [either] such person's mailing address, email address, or telephone number and the effective date thereof within 30 days before or after such effective date.
(e) Interpretive Comment. This section should be read in conjunction with §519.6 of this title (relating to Subpoenas).
(f) Interpretive Comment. In this section, the term board includes board staff.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500130
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842
The Texas State Board of Public Accountancy (Board) proposes an amendment to §507.4 concerning Confidentiality.
Background, Justification and Summary
Section 901.160 of the Public Accountancy Act states that information regarding a disciplinary action is confidential prior to the information going to public hearing. The proposed rule revision makes it clear that a complaint investigation that does not result in disciplinary action is also not public information. The purpose of the provision in the Public Accountancy Act is to protect unproven allegations from becoming public information.
Fiscal Note
William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment.
Public Benefit
The adoption of the proposed rule amendment will clarify that all complaint investigations are confidential prior to going to public hearing.
Probable Economic Cost and Local Employment Impact
Mr. Treacy, Executive Director, has determined that there will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.
Small Business, Rural Community and Micro-Business Impact Analysis
William Treacy, Executive Director, has determined that the proposed amendment will not have an adverse economic effect on small businesses, rural communities or micro-businesses because the amendment does not impose any duties or obligations upon small businesses, rural communities or micro-businesses; therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis are not required.
Government Growth Impact Statement
William Treacy, Executive Director, has determined that for the first five-year period the amendment is in effect, the proposed rule: does not create or eliminate a government program; does not create or eliminate employee positions; does not increase or decrease future legislative appropriations to the Board; does not increase or decrease fees paid to the Board; does not create a new regulation; limits the existing regulation; does not increase or decrease the number of individuals subject to the proposed rule's applicability; and does not positively or adversely affect the state's economy.
Takings Impact Assessment
No takings impact assessment is necessary because there is no proposed use of private real property as a result of the proposed rule revision.
The requirement related to a rule increasing costs to regulated persons does not apply to the Texas State Board of Public Accountancy because the rule is being proposed by a self-directed semi-independent agency. (§2001.0045(c)(8))
Public Comment
Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 505 E. Huntland Dr., Suite 380, Austin, Texas 78752 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2025.
The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses. If the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally, describe how the health, safety, environmental, and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, §2006.002(c).
Statutory Authority
The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code §901.151, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act.
No other article, statute or code is affected by this proposed amendment.
§507.4.Confidentiality.
(a) Members of the board, advisory committee members, the executive director, members of board staff, independent contractors and consultants retained by the board shall not disclose any confidential information which comes to their attention, except as may be required by law.
(b) Regardless of whether the board takes disciplinary
action or not, all complaint investigations, including [All
complaints,] investigation files, investigation reports, and
other investigative information in the possession of, received or
gathered by the board is confidential, prior to public hearing
or board action, and any employee, agent, or member of the board
may not disclose the information contained in these files except to
another governmental, regulatory or law enforcement agency engaged
in an enforcement action and as provided for in §901.160 of the
Act (relating to Availability and Confidentiality of Certain Board
Files) or upon receiving written authorization from the license applicant
or current or former license holder who is the subject of the investigation.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2025.
TRD-202500131
J. Randel (Jerry) Hill
General Counsel
Texas State Board of Public Accountancy
Earliest possible date of adoption: March 2, 2025
For further information, please call: (512) 305-7842