Virginia Code 54.1-4412.1: Licensing requirements for firms
A. Only a firm can provide attest services, compilation services, or financial statement preparation services to persons or entities located in Virginia. However, this shall not affect the privilege of a person who is not licensed to include a statement on financial statements indicating that no assurance is provided on the financial statements, to say that financial statements have been compiled, or to use the compilation language, as prescribed by subsections B and C of § 54.1-4401.
Terms Used In Virginia Code 54.1-4412.1
- Assurance: means any form of expressed or implied opinion or conclusion about the conformity of a financial statement with any recognition, measurement, presentation, or disclosure principles for financial statements. See Virginia Code 54.1-4400
- Attest services: means audit, review, or other attest services for which standards have been established by the Public Company Accounting Oversight Board, by the Auditing Standards Board or the Accounting and Review Services Committee of the American Institute of Certified Public Accountants, or by any successor standard-setting authorities. See Virginia Code 54.1-4400
- Board: means the Virginia Board of Accountancy. See Virginia Code 54.1-4400
- Compilation services: means compiling financial statements in accordance with standards established by the American Institute of Certified Public Accountants or by any successor standard-setting authorities. See Virginia Code 54.1-4400
- CPA: means certified public accountant. See Virginia Code 54.1-4400
- Financial statement: means a presentation of historical or prospective financial information about one or more persons or entities. See Virginia Code 54.1-4400
- Financial statement preparation services: means financial statement preparation services for which standards have been established by the American Institute of Certified Public Accountants or by any successor standard-setting authorities. See Virginia Code 54.1-4400
- Firm: means an entity formed by one or more licensees as a sole proprietorship, a partnership, a corporation, a limited liability company, or any other type of entity permitted by law. See Virginia Code 54.1-4400
- License of another state: means the license that is issued by the board of accountancy of a state other than Virginia that gives a person the privilege of using the CPA title in that state or that gives a firm the privilege of providing attest services, compilation services, and financial statement preparation services to persons and entities located in that state. See Virginia Code 54.1-4400
- Licensed: means holding a Virginia license or the license of another state. See Virginia Code 54.1-4400
- Person: includes any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof. See Virginia Code 1-230
- Process: includes subpoenas, the summons and complaint in a civil action, and process in statutory actions. See Virginia Code 1-237
- State: means any state of the United States, the District of Columbia, or any territory of the United States that is a recognized jurisdiction by the National Association of State Boards of Accountancy or its successor. See Virginia Code 54.1-4400
- Virginia license: means a license that is issued by the Board giving a person the privilege of using the CPA title in Virginia or a firm the privilege of providing attest services, compilation services, and financial statement preparation services to persons and entities located in Virginia. See Virginia Code 54.1-4400
B. A firm that provides attest services, compilation services, or financial statement preparation services to persons or entities located in Virginia shall obtain a Virginia license if the principal place of business in which it provides those services is in Virginia.
C. A firm that is not required to obtain a Virginia license may provide attest services, compilation services, or financial statement preparation services to persons or entities located in Virginia if:
1. The firm can lawfully provide attest services, compilation services, or financial statement preparation services to persons or entities in the state where its principal place of business is located; and
2. The firm complies with subdivisions D 1, 2, 4, 5, 6, and 7 and subsection F; and
3. The firm’s personnel working on the engagement either (i) hold a Virginia license or (ii) hold the license of another state and comply with the substantial equivalency provisions of § 54.1-4411; or
4. The firm’s personnel working on the engagement are under the supervision of a person who either (i) holds a Virginia license or (ii) holds the license of another state and complies with the substantial equivalency provisions of § 54.1-4411.
D. For a firm to obtain and hold a Virginia license:
1. As determined on a firm-wide basis:
a. At least 51 percent of the owners of the firm shall be licensees, trustees of an eligible employee stock ownership plan as defined in § 13.1-543, or a firm that meets this requirement; and
b. At least 51 percent of the voting equity interest in the firm shall be owned by persons who are licensees, by trustees of an eligible employee stock ownership plan as defined in § 13.1-543, or by a firm that meets this requirement.
If the death, retirement, or departure of an owner causes either of these requirements not to be met, the requirement shall be met within one year after the death, retirement, or departure of the owner.
2. The Board shall prescribe requirements concerning the hours that owners who are not licensees work in the firm and may prescribe other requirements for those persons.
3. All attest services, compilation services, and financial statement preparation services provided for persons and entities located in Virginia shall be under the supervision of a person who either (i) holds a Virginia license or (ii) holds the license of another state and complies with the substantial equivalency provisions of § 54.1-4411.
4. Any person who releases or authorizes the release of reports on attest services, compilation services, or financial statement preparation services provided for persons or entities located in Virginia shall:
a. Either (i) hold a Virginia license or (ii) hold the license of another state and comply with the substantial equivalency provisions of § 54.1-4411; and
b. Meet any additional requirements the Board prescribes.
5. The firm shall conduct its attest services, compilation services, and financial statement preparation services in conformity with the standards of conduct and practice in § 54.1-4413.3 and regulations promulgated by the Board.
6. If the services provided by the firm are within the scope of the practice-monitoring program of the American Institute of Certified Public Accountants or its successor, the firm shall enroll in the program or in another practice-monitoring program for attest services, compilation services, and financial statement preparation services that is approved by the Board. In addition, if enrolled the firm shall:
a. Comply with any requirements prescribed by the Board in response to the results of peer reviews; and
b. Participate in the American Institute of Certified Public Accountants’, or sponsoring organizations’, Facilitated State Board Access process, or its successor process, for peer reviews.
7. The name of the firm shall not be false, misleading, or deceptive.
E. The Board shall prescribe the methods and fees for a firm to apply for the issuance, renewal, or reinstatement of a Virginia license.
F. An entity may not use the CPA title in Virginia unless it meets the requirements of subdivision D 1.
2007, c. 804; 2014, cc. 40, 755; 2015, c. 287; 2017, c. 403.