Title of Regulation: 18VAC5-22. Board of Accountancy Regulations (amending 18VAC5-22-20).

Statutory Authority: § 54.1-4402 and 54.1-4403 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: August 22, 2018.

Effective Date: September 6, 2018.

Agency Contact: Rebekah E. Allen, Enforcement Director, Board of Accountancy, 9960 Mayland Drive, Suite 402, Richmond, VA 23223, telephone (804) 367-2006, FAX (804) 527-4207, or email rebekah.allen@boa.virginia.gov.

Basis: Section 54.1-4403 of the Code of Virginia grants authority to the Board of Accountancy to promulgate regulations, "in accordance with the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia) necessary to assure continued competency, to prevent deceptive or misleading practices by licensees, and to effectively administer the regulatory system." The Board is the promulgating entity for regulations governing public accountancy. Subdivision 4 of § 54.1-4403 references the board's power to levy and collect fees.

Purpose: This amendment is intended to reflect current services offered by the board and to update the definitions of services to match the board's statutes. The board's rationale is to repeal regulations, or portions of regulations, that are unnecessary or no longer in use, and to make sure that the language of its regulations matches the language of its governing statutes. As the board is funded by the fees it collects, having an accurate and up-to-date fee schedule ensures that it can carry out its mission of protecting the welfare of citizens through a program of examination, licensure of individuals and CPA firms, consumer protection through enforcement action, continuing professional education, and peer review oversight.

Rationale for Using Fast-Track Rulemaking Process: This rulemaking is expected to be noncontroversial because the Board is eliminating obsolete fees and updating fee descriptions to match statutory provisions. This change is also supported by the Virginia Society of Certified Public Accountants.

Substance: The proposed amendment eliminates fees for services the board no longer performs and updates fee descriptions to match statutory provisions.

Issues: The primary advantages to the public are reduced confusion by updating fee descriptions to match the board's statutory provisions. It also reduces confusion by repealing obsolete fees that are not collected since the service tied to the fee is no longer performed. The primary advantage to the board and Commonwealth is consistency across statutes and regulations and ensuring the list of fees is up to date. There are no primary disadvantages to the public. There are no primary disadvantages to the board or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Board of Accountancy (Board) proposes to eliminate an obsolete fee and amend language for consistency with the Code of Virginia.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. The current regulation includes a $25 fee for "Preliminary evaluation of whether a person has met the requirements to take the CPA examination." According to the Board, preliminary evaluations are no longer performed. Consequently, the Board proposes to repeal the inclusion of this fee in the regulation.

The Board also proposes two amendments to conform regulatory language with the Code of Virginia. The first would add "financial statement preparation services" to the list of services provided when the board lifts a suspension. Because the change is consistent with statutory language throughout Chapter 44 (§ 54.1-4400 et seq.) of Title 54 of the Code of Virginia regarding penalties that can be imposed on public accountants by the board in § 54.1-4413.4, this change will provide clarification to services provided by the board but will not change practice. The conforming amendment would change the text of the term, "wall certificate" to "CPA wall certificate". This term has been used in legislation since 2007 with the enactment of Chapter 804 of the 2007 Acts of Assembly.¹

None of the proposed amendments change requirements in practice, but nonetheless would be beneficial in that they improve clarity for readers of the regulation.

Businesses and Entities Affected. The proposed regulation affects CPA firms and CPAs, and CPA licensure applicants. As of September 30, 2017, there were 27,842 persons who held Virginia CPA licenses, and 1,179 entities or sole proprietors who held Virginia CPA firm licenses. Annually, there are on average 1,360 total applicants for licensure.² All or most CPA firms would qualify as small businesses.

Localities Particularly Affected. The proposed amendments do not disproportionately affect particular localities.

Projected Impact on Employment. The proposed amendments do not significantly affect employment.

Effects on the Use and Value of Private Property. The proposed amendments do not affect the use and value of private property.

Real Estate Development Costs. The proposed amendments do not affect real estate development costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The proposed amendments do not significantly affect costs for small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed amendments do not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendments do not adversely affect businesses.

Localities. The proposed amendments do not adversely affect localities.

Other Entities. The proposed amendments do not adversely affect other entities.

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¹ See http://leg1.state.va.us/cgi-bin/legp504.exe?071+ful+CHAP0804.

² Data source: Board of Accountancy.

Agency's Response to Economic Impact Analysis: The Virginia Board of Accountancy concurs with the economic impact analysis of the Department of Planning and Budget.

Summary:

The amendments update the Virginia Board of Accountancy's fee schedule to reflect current services and match statutory definitions.

18VAC5-22-20. Fees.

A. The board shall charge the following fees for services it provides:

Processing an initial application to take one or more sections of the CPA examination	$120
Processing additional applications to take one or more sections of the CPA examination	$20
Preliminary evaluation of whether a person has met the requirements to take the CPA examination	$25
Processing an application for issuance of a Virginia license to a person	$75
Processing an application for issuance of a Virginia license to a firm	$100
Processing an application for the timely renewal of a person's Virginia license except as provided in subsection B of 18VAC5-22-180	$60
Processing an application for the timely renewal of a firm's Virginia license except as provided in subsection B of 18VAC5-22-180	$75
Additional fee for processing an application for the renewal of a person's Virginia license that is not timely	$100
Additional fee for processing an application for the renewal of a firm's Virginia license that is not timely	$100
Processing an application for reinstatement of a person's Virginia license	$350
Processing an application for reinstatement of a firm's Virginia license	$500
Processing an application for lifting the suspension of the privilege of using the CPA title in Virginia	$350
Processing an application for lifting the suspension of the privilege of providing attest services or, compilation services, or financial statement preparation services for persons or entities located in Virginia	$500
Providing or obtaining information about a person's grades on sections of the CPA examination	$25
Processing requests for verification that a person or firm holds a Virginia license:
1. Online request	$25
2. Manual request	$50
Providing an additional CPA wall certificate	$25
Additional fee for not responding within 30 calendar days to any request for information by the board under subsection A of 18VAC5-22-170	$100
Additional fee for not using the online payment option for any service provided by the board	$25

B. All fees for services the board provides are due when the service is requested and are nonrefundable.