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Reflections of the Red Rocks at sunset
These are frequently asked questions about CPA Firms:  
  What is the definition of the Practice of Accounting?
What is Public Accounting?
Do I need to be registered as a firm?
What are the requirements to operate as a CPA firm in Arizona?
After I’m registered, are there any ongoing notification requirements?
How are Arizona CPA firms impacted by peer review?
What is Facilitated State Board Access?
How do I change the name of my firm?
What happens if a partner leaves? Do we have to change the firm name?
How often does my firm's registration renew?
How much does it cost to renew my firm's registration?
How do I cancel my firm’s registration?
Do I have the option to relinquish my firm registration?
Can I reinstate my firm’s registration if it has been cancelled, expired, or relinquished?
 
   
 What is the definition of the Practice of Accounting?  
  Pursuant to A.R.S. § 32-701(20), the Practice of Accounting means providing accounting services for a client or employer. Pursuant to A.R.S. § 32-701(7), client means a person or entity, other than one’s employer, for whom accounting services are provided. Pursuant to A.R.S. § 32-701(11), employer means a person or entity that hires an individual to perform a service and that directs and controls the manner in which the service is performed.
a helpful hint Helpful Hints - A.R.S. § 32-701(1) "accounting services" means services that are commonly and historically performed by accountants including:
  • Recording or summarizing financial transactions
  • Bookkeeping
  • Analyzing or verifying financial information
  • Auditing
  • Reviewing or compiling financial statements
  • Reporting financial results
  • Financial planning
  • Providing attestation services (See Helpful Hints below)
  • Prividing tax services
  • Providing consulting services (See Helpful Hints below)
a helpful hint Helpful Hints - A.R.S. § 32-701(3) "Attest services" means the following services that are rendered by the holder of a certificate issued by the Board:
(a) Audits or other engagements to be performed in accordance with the statements on auditing standards adopted by the American Institute of Certified Public Accountants.
(b) Reviews of financial statements to be performed in accordance with the statements on standards for accounting and review services adopted by the American Institute of Certified Public Accountants.
(c) Any examination of prospective financial information to be performed in accordance with the statements on standards for attestation engagements adopted by the American Institute of Certified Public Accountants.
(d) Any engagement to be performed in accordance with the standards of the Public Company Accounting Oversight Board or its successor.
(e) Any examination, review or agreed on procedure engagement to be performed in accordance with the statements on standards for attestation engagements adopted by the American Institute of Certified Public Accountants, other than an examination described in subdivision (c) of this paragraph.
a helpful hint Helpful Hints - A.R.S. § 32-701(8) "Consulting services" includes management advisory services, litigation support services, valuation services and other services that require the use of technical skills, education, observation, experience and knowledge to develop an analytical approach to process and to present findings, conclusions or recommendations.

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 What is Public Accounting?  
  Pursuant to A.R.S. §701(21), the practice of public accounting means providing accounting services for a client but does not include providing accounting services, other than attest services or compilation services, for a nonprofit entity or a family member without an expectation of and without receiving compensation.
a helpful hint Helpful Hints - A.R.S. § 32-701(7) "Client" means a person or entity, other than one's employer, for whom accounting services are provided.

Please see the following FAQ – What is the definition of the Practice of Accounting? - for the definition of Accounting Services.
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 Do I need to be registered as a firm?  
  A.R.S. §32-731 regarding firm qualifications requires a partnership engaged in Arizona in the practice of accounting to register as a firm. A.R.S. §32-731(I)(2) defines partnership as including a professional corporation, a limited liability company and a professional limited liability company.

Additionally, 32-747.01 requires an individual who holds a certificate issued by the Board to practice as a Certified Public Accountant or Public Accountant to register a firm if the individual provides attest services.

Please see the following FAQ – What is Public Accounting? - for the definition of public accounting.
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 What are the requirements to operate as a CPA firm in Arizona?  
  Pursuant to A.R.S. §§ 32-731 and 32-747.01, in order to qualify as a CPA firm in Arizona,
  • At least one partner shall be a resident and a full-time practicing CPA in good standing in Arizona; and
  • At least 51% of the ownership must belong to holders in good standing of CPA certificates or licenses in any jurisdiction.
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 After I’m registered, are there any ongoing notification requirements?  
  Yes, pursuant to A.R.S. §32-731(E), you are required to notify the Board in writing within one month of any of the following. Please note that the term “partner” includes any shareholder of a professional corporation (PC) and any member of a limited liability company (LLC) or professional limited liability company (PLLC). Also, the term “partnership” includes a PC, a LLC and a PLLC.
  1. The termination of any partnership.
  2. The admission of a partner to a partnership that is registered if the partner is a CPA or PA.
  3. The withdrawal of a partner from a partnership that is registered if the partner is a CPA or PA.
  4. A change of a partner’s residence from this state to another jurisdiction or from another jurisdiction to Arizona if the partner is in a partnership that is registered and the partner was a CPA or PA.
  5. The death of a person who is a partner in a partnership that is registered and who was a CPA or PA.
  6. Any change by any jurisdiction in the certificate or license status of a CPA or PA owner of the partnership that prevents the certificate or license from being in good standing or that prevents the right of the CPA or PA to practice accounting as a CPA or PA in that jurisdiction.
  7. Any change in the number or location of offices of the partnership in this state and any change in the identity of the individuals in charge of the partnership’s offices in this state.
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 How are Arizona CPA firms impacted by peer review?  
  Pursuant to A.A.C. R4-1-454, each firm that performs attest services or full disclosure compilation services will need to complete a peer review within the three years immediately preceding the firm's registration date. For a further review of the regulation governing peer review, please see the Peer Review page under the Firms tab on this website.

If the firm accepts an engagement, which for the first time will require the firm to complete a peer review, pursuant to A.A.C. R4-1-454(I)(2)(b):
  • The firm agrees to notify the Board within 90 days after accepting an attest services or full-disclosure compilation service engagement;
  • The firm will undergo a peer review within 18 months from the year-end of the engagement accepted (for example, if the engagement’s year end is 12/31/16, the firm must undergo a peer review by 6/30/2018).
NOTE! The Peer Review process is often more extensive and expensive to complete than a registrant may realize. It is advised that a registrant not perform services that would subject the firm to peer review without first inquiring with the California Society of CPAs (CSCPA) Peer Review program to better understand the full process.

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 What is Facilitated State Board Access?  
  The Facilitated State Board Access (FSBA) is a process that addresses the demand for greater peer review transparency. This is a program that the American Institute of CPAs (AICPA) created to help the profession keep up with the evolving changes in the business and regulatory environments. CPAs will continue to use the current peer review process until the State Board of Accountancy updates their rules to require firms to notify their peer review administering entity that the firm’s peer review documents shall be made available to the AICPA Facilitated State Board Access.

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 How do I change the name of my firm?  
  If you own a firm, changes to the firm’s name require Board approval and can be submitted for Board review using the Application for Name Change, Certified Public Accountant Firm Form . Please see A.A.C. R4-1-455.03(D)(2) for more information about form of practice and name changes.
a helpful hint Helpful Hints - A.A.C R4-1-455.03(D)(2) - A certified public accountant or public accountant shall not use a professional or firm name or designation that is misleading about the legal form of the firm, or about the persons who are partners, officers, members, managers, or shareholders of the firm, or about any other matter. A firm name or designation shall not include words such as “& Company,” “& Associates,” or “& Consultants” unless the terms refer to additional full‐time CPAs that are not otherwise mentioned in the firm name.

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 What happens if a partner leaves? Do we have to change the firm name?  
  Should the firm lose a partner, the firm is not required to change the firm name, pursuant to A.R.S. § 32-747(C). The law states a firm is not prohibited from the continuous use of a partnership name, or a modification of the name, by a successor firm formed by the remaining partner(s).

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 How often does my firm's registration renew?  
  Pursuant to A.R.S. § 32-730, the Board requires every CPA firm to renew its registration on a biennial basis. Pursuant to A.A.C. R4-1-345(B)(2), firms initially registered in an even-numbered year shall register during the month of the initial registration in every even-numbered year. Firms initially registered an odd-numbered year shall register during the month of the initial registration in every odd-numbered year.

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 How much does it cost to renew my firm's registration?  
  Pursuant to A.A.C. R4-1-345(C)(2), the biennial registration fee for each CPA firm is $300 per registration period. A late fee of $50 will be assessed if the firm's renewal is not received on time. However, pursuant to A.R.S. §32-729, a registration fee is not charged for the registration of additional offices of the same firm or for the registration of a sole practitioner. top
     
 How do I cancel my firm’s registration?  
  Pursuant to A.R.S. § 32-730.02 a registered firm may cancel its registration as long as the firm's registration in not under a disciplinary order by the Board, except for suspension for nonregistration pursuant to A.R.S. §32-741.01, or against whom disciplinary proceedings have been initiated. A CPA firm that is no longer actively engaged in the practice of public accounting and which does not want to renew the firm's registration may request that the registration be canceled by completing the following Firm Cancellation Order Form. All information asked for in the Cancellation Order can be found by reviewing the Firm’s information in the firm section of the CPA Directory below.
a helpful hint Helpful Hints - Please complete this PDF fillable form on your computer as it auto populates data that you only have to enter once. The form is not designed to be printed and filled out by hand, with the exception of your original signature, and doing so may result in an incomplete submission if you’re not conscientious.

A partner of the firm must complete, date, sign and return the Order back to the Board office. The Order will require the Board’s approval before the cancellation is complete. Every blank fillable space must be completed by the signer. Any form submitted to the Board office that is not complete will be returned to the Firm for completion before being accepted for submission to the Board for its approval.

Firm Cancellation Order Form

CPA Directory
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 Do I have the option to relinquish my firm registration?  
  A.R.S. § 32-742(C) allows a firm to relinquish its registration pending or in lieu of an investigation or a disciplinary proceeding or while under a disciplinary order. The Board shall consider a relinquishment and may determine whether to accept the relinquishment and if accepted shall issue an order documenting its decision. top
   
 Can I reinstate my firm’s registration if it has been cancelled, expired,  or relinquished?  
  Yes, pursuant to A.R.S. §§ 32-730.02 (D) and 32-730.03(D) respectively the process to reinstate from cancelled or expired status is essentially the same as an initial registration in that you must file an application to register and pay a registration fee and meet all the requisite requirements of A.R.S. §32-731 relating to firm registration. If the Board approves, the effective date of the firm’s formation will reflect the most recent date of reinstatement or revocation.

Pursuant to A.R.S. §32-742(E), the process to reinstate from relinquished status is more rigorous. In addition to the aforementioned requirements, your firm must demonstrate through substantial evidence to the Board that the firm is completely rehabilitated with respect to the conduct that was pending at the time of relinquishment or revocation.
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