South Carolina Code 40-2-40. Grant or renewal of registration to practice as firm; qualifications for registration; changes in identities of partners or officers
(B) The following must hold a registration issued pursuant to this section:
Terms Used In South Carolina Code 40-2-40
- Board: means the South Carolina Board of Accountancy. See South Carolina Code 40-2-20
- Client: means a person or entity that agrees with a licensee or licensee's employer to receive any professional service. See South Carolina Code 40-2-20
- Compilation: means providing a service of any compilation engagement to be performed in accordance with SSARS. See South Carolina Code 40-2-20
- Firm: includes a person or persons practicing public accounting in the form of a proprietorship, partnership, limited liability partnership, limited liability company, or professional corporation or association. See South Carolina Code 40-2-20
- Firm ownership: means one hundred percent of the partners, members, managers, shareholders, and equity owners in a firm, which must be owners. See South Carolina Code 40-2-20
- License: means authorization to practice as issued under this chapter. See South Carolina Code 40-2-20
- Licensee: means the holder of a license. See South Carolina Code 40-2-20
- Manager: means a licensee in responsible charge of an office. See South Carolina Code 40-2-20
- Owner: means any person who owns all or part of a firm. See South Carolina Code 40-2-20
- Practice of accounting: means :
(a) issuing a report on financial statements of a person, firm, organization, or governmental unit or offering to render or rendering any attest or compilation service. See South Carolina Code 40-2-20 - Principal place of business: means the office location designated by a licensee for the purposes of substantial equivalency and reciprocity. See South Carolina Code 40-2-20
- Professional: means arising out of or related to the specialized knowledge or skills associated with licensees. See South Carolina Code 40-2-20
- Registration: means an authorization, issued under this chapter, to practice as a firm. See South Carolina Code 40-2-20
- Resident manager: means a responsible party for a firm. See South Carolina Code 40-2-20
- State: means any state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and Guam; except that "this State" means the State of South Carolina. See South Carolina Code 40-2-20
(1) a firm with an office in this State performing attest services as defined in § 40-2-20(2) or engaging in the practice of accounting;
(2) a firm with an office in this State that uses the title "CPA" or "CPA firm"; or
(3) a firm that does not have an office in this State but performs attest services described in § 40-2-20(2) for a client in this State, unless it is exempt from registration pursuant to § 40-2-30(I).
(C) Qualifications for registration as a certified public accountant firm are as follows:
(1) A simple majority of the firm ownership in terms of financial interests and voting rights of all partners, officers, shareholders, members, or managers must belong to certified public accountants currently licensed in some state. Although firm ownership may include non-CPA owners, the firm and its owners must comply with regulations promulgated by the board. All non-CPA owners must be active individual participants in the firm or affiliated entities.
(2) Partners, officers, shareholders, members, or managers whose principal place of business is in this State, and who also perform professional services in this State, must hold a valid license issued pursuant to this section. An individual who has practice privileges under § 40-2-245 must not be required to obtain a license from this State pursuant to § 40-2-35.
(3) For firms registering under subsection (B)(1)(a) or (b), there must be a designated resident manager in charge of each office in this State who must be a certified public accountant licensed in this State.
(4) Non-CPA owners must not assume ultimate responsibility for any financial statement, attest, or compilation engagement.
(5) Non-CPA owners shall abide by the code of professional ethics adopted pursuant to this chapter.
(6) Owners shall at all times maintain ownership equity in their own right and must be the beneficial owners of the equity capital ascribed to them. Provision must be made for the ownership to be transferred to the firm or to other qualified owners if the noncertified public accountant ceases to be an active individual participant in the firm.
(7)(a) This section applies only to non-CPA owners who are residents of this State.
(b) Non-CPA owners must complete the same number of hours of continuing professional education as licensed certified public accountants in this State, including the annual ethics requirement pursuant to § 40-2-250(C)(6).
(c) Non-CPA owners who are licensed professionals subject to continuing education requirements applicable to that profession may complete the required number of continuing professional education hours in courses offered or accepted by organizations or regulatory bodies governing that profession, and also must complete the same number of hours of continuing professional education as licensed certified public accountants in this State.
(8) A certified public accounting firm and its designated resident manager under item (3) are responsible for the following in regard to a noncertified public accountant owner:
(a) a non-CPA owner shall comply with all applicable accountancy statutes and regulations; and
(b) a non-CPA owner shall be of good moral character and shall not engage in any conduct that, if committed by a licensee, would constitute a violation of the regulations promulgated by the board.
(D) Registration must be initially issued and renewed annually. Applications for registration must be made in such form, and in the case of applications for renewal, between such dates as the board by regulation may specify, and the board shall grant or deny any such application after filing in proper form.
(E) Any firm applicant for initial issuance or renewal of a registration to practice pursuant to this chapter shall register each firm within this State with the board and shall demonstrate that all attest and compilation services rendered in this State are under the charge of a person holding a valid license issued pursuant to this section or the corresponding provision of prior law or of some other state.
(F) The board may charge a fee for each application for initial issuance or renewal of a registration issued pursuant to this section.
(G) An applicant for initial issuance or renewal of a registration to practice pursuant to this chapter shall list on the application all states in which the firm has applied for or holds registration and shall list any past denial, revocation, or suspension of a registration by any other state.
(H) Each holder of or applicant for a registration issued pursuant to this section shall notify the board in writing, within thirty days after its occurrence, of any change in the identities of partners, officers, shareholders, members, or managers whose principal place of business is in this State, any change in the number or location of offices within this State, any change in the identity of the licensee in charge of these offices, and any issuance, denial, revocation, or suspension of a registration by any other state.
(I) A firm that falls out of compliance with the provisions of this section due to changes in firm ownership or personnel, after receiving or renewing a permit, shall take corrective action to bring the firm back into compliance as quickly as possible. The board may grant a reasonable period of time for a firm to take this corrective action. Failure to bring the firm back into compliance within a reasonable period as defined by the board shall result in the suspension or revocation of the firm permit.