1. (a) A firm is required to hold a firm license if the firm:

   1. (1) establishes or maintains an office in this state; or

   2. (2) performs for an entity that has its principal office in this state:

      1. (A) a financial statement audit or other engagement that is to be performed in accordance with SAS;
      2. (B) an examination of prospective financial information that is to be performed in accordance with SSAE; or
      3. (C) an engagement that is to be performed in accordance with auditing standards of the PCAOB or its successor.
2. (b) A CPA firm that is licensed and has its primary place of business in another state and is not required to hold a firm license pursuant to subsection (a) of this section may practice in this state without a firm license or notice to the board if the firm's practice in this state is performed by an individual who holds a license under Chapter 515 of this title (relating to Licenses) or who practices under a privilege pursuant to §517.2 of this chapter (relating to Practice by Certain Out of State Individuals).

3. (c) A firm described by subsection (b) of this section may exercise all the practice privileges of a firm license holder, except that the firm:

   1. (1) may not perform the services described by subsection (a)(2) of this section; and

   2. (2) may perform an engagement required by the board to be performed in accordance with SSARS adopted by the AICPA or another national or international accountancy organization recognized by the board, or 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 organization adopted by the board, for an entity that has its principal office in this state only if:

      1. (A) the firm meets the requirements of §901.354(a) and (b) of the Act (relating to Firm License Information and Eligibility);
      2. (B) the firm complies with the board's peer review program found in Chapter 527 of this title (relating to Peer Review); and
      3. (C) the services are performed by an individual who holds a license under this chapter or practices under a privilege provided in §517.2 of this chapter and §901.462 of the Act (relating to Practice by Out-of-State Practitioner with Substantially Equivalent Qualifications).

Source Note:The provisions of this §517.1 adopted to be effective October 11, 2007, 32 TexReg 7063; amended to be effective August 17, 2008, 33 TexReg 6380; amended to be effective August 8, 2012, 37 TexReg 5782.