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. (1) "Act" means the Public Accountancy Act, Chapter 901, Occupations Code;
2. (2) "Advertisement" means a message which is transmitted to persons by, or at the direction of, a certificate or registration holder and which has reference to the availability of the certificate or registration holder to perform Professional Services;
3. (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. (4) "Attest Service" means:

   1. (A) an audit or other engagement required by the board to be performed in accordance with the auditing standards adopted by the American Institute of Certified Public Accountants or another national accountancy organization recognized by the board;
   2. (B) a review, compilation or other engagement required by the board to be performed in accordance with standards for accounting and review services adopted by the American Institute of Certified Public Accountants or another national accountancy organization recognized by the board;
   3. (C) an engagement required by the board to be performed in accordance with standards for attestation engagements adopted by the American Institute of Certified Public Accountants or another national accountancy organization recognized by the board; or
   4. (D) any other assurance service required by the board to be performed in accordance with professional standards adopted by the American Institute of Certified Public Accountants or another national accountancy organization recognized by the board;
5. (5) "Board" means the Texas State Board of Public Accountancy;

6. (6) "Certificate or registration holder" the holders of all currently valid:

   1. (A) certificates issued to individuals who have been awarded the designation certified public accountant by the board pursuant to the Act, or pursuant to corresponding provisions of a prior Act;
   2. (B) registrations with the board under §901.355 of the Act; and
   3. (C) firm licenses or registrations;
7. (7) "Charitable Organization" means an organization which has been granted tax-exempt status under the Internal Revenue Code of 1986, §501(c), as amended;
8. (8) "Client" means a person who enters into an agreement with a license holder or a license holder's employer to receive a professional accounting service;

9. (9) "Client Practice of Public Accountancy" is the offer to perform or the performance by a certificate or registration holder for a client or a potential client of a service involving the use of accounting, attesting, or auditing skills. The phrase "service involving the use of accounting, attesting, or auditing skills" includes:

   1. (A) the issuance of reports on, or the preparation of, financial statements, including historical or prospective financial statements or any element thereof;
   2. (B) the furnishing of management or financial advisory or consulting services;
   3. (C) the preparation of tax returns or the furnishing of advice or consultation on tax matters;
   4. (D) 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/or
   5. (E) the performance of litigation support services;
10. (10) "Commission" means compensation for recommending or referring any product or service to be supplied by another person;
11. (11) "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 certificate or registration holder'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;
12. (12) "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. Incidental financial data to support recommendations to a client or in documents for which the reporting is governed by Statements or Standards for Attestation Engagements and tax returns and supporting schedules do not constitute financial statements for the purposes of this definition;
13. (13) "Firm" means a proprietorship, partnership, limited liability partnership, limited liability company, or professional or other corporation, or other business engaged in the practice of public accountancy;
14. (14) "Good standing" means compliance by a certificate with the board's licensing rules, including the mandatory continuing education requirements 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 certificate or registration holder must be in compliance with all the provisions of the board order to be considered in good standing;
15. (15) "Licensee" means the holder of a license issued by the board to a certificate or registration holder pursuant to the Act, or pursuant to provisions of a prior Act;
16. (16) "Peer review" or "Quality Review" 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. (17) "Person" means an individual, partnership, corporation, registered limited liability partnership, or limited liability company;
18. (18) "Practice unit" means an office of a firm required to be licensed with the board for the purpose of practicing public accountancy;

19. (19) "Professional services" or "professional accounting work" means services or work that requires the specialized knowledge or skills associated with certified public accountants, including:

    1. (A) issuing reports on financial statements;
    2. (B) providing management or financial advisory or consulting services;
    3. (C) preparing tax returns; and
    4. (D) providing advice in tax matters;
20. (20) "Report" means, when used with reference to financial statements, either an engagement performed through the application of procedures under the Statement on Standards for Accounting and Review Services or any opinion, report, or other form of language that states or implies assurance as to the reliability of any financial statements and/or includes or is accompanied by any statement or implication that the person or firm issuing it has special knowledge or competence in accounting or auditing. Such a statement or implication of special knowledge or competence may arise from use by the issuer of the report of names or titles indicating that he or it is an accountant or auditor or from the language of the report itself. The term "report" includes any form of language which disclaims an opinion when such form of language is conventionally understood to imply any assurance as to the reliability of the financial statements to which reference is made. It also includes any form of language conventionally used with respect to a compilation or review of financial statements, and any other form of language that implies such special knowledge or competence;
21. (21) Interpretive Comment: The practice of public accountancy is defined in §901.003 of the Act (relating to the Practice of Public Accountancy).

Source Note:The provisions of this §501.52 adopted to be effective June 11, 2000, 25 TexReg 5334; amended to be effective December 6, 2001, 26 TexReg 9857; amended to be effective February 4, 2004, 29 TexReg 963; amended to be effective June 9, 2004, 29 TexReg 5625.