Title of Regulation: 18VAC5-22. Board of Accountancy Regulations (amending 18VAC5-22-40).

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: October 3, 2018.

Effective Date: October 18, 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: Subdivision 3 of § 54.1-4403 of the Code of Virginia grants authority to the board to promulgate regulations necessary to assure continued competency, to prevent deceptive or misleading practices by licensees, and to effectively administer the regulatory system.

Purpose: This amendment is intended to remove duplicative definitional information because the information was added to § 54.1-4400 of the Code of Virginia by Chapter 403 of the 2017 Acts of Assembly. The board's rationale is to ensure that its regulations are not duplicative of information already found in statute and to reduce confusion about which definition should be used.

Rationale for Using Fast-Track Rulemaking Process: This rulemaking is expected to be noncontroversial because the information being removed now exists in statute. This change is also supported by the Virginia Society of Certified Public Accountants.

Substance: The amendment removes the existing definition and replaces it with a citation to the correct statute.

Issues: The primary advantages to the public and the agency are reduced confusion by removing duplicative material from the regulation that is also found in statute. There are no primary disadvantages to the public, the board, or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. Definitions in the regulation of "providing services to the public" and "providing services to an employer" are repetitious of definitions listed in Code of Virginia § 54.1-4400. The Board proposes to replace the definitions with a citation to § 54.1-4400.

Result of Analysis. The proposed amendment will not have a significant impact.

Estimated Economic Impact. The proposed amendment would not affect requirements or interpretations. It may add a small amount of time for readers of the regulation seeking to understand the law.

Businesses and Entities Affected. The proposed regulation affects CPA firms and CPAs. As of September 30, 2017, there were 27,842 persons who held Virginia CPAs licenses, and 1,179 entities or sole proprietors that held Virginia CPA firm licenses.¹ All or most CPA firms would qualify as small businesses.

Localities Particularly Affected. The proposed amendment does not disproportionately affect particular localities.

Projected Impact on Employment. The proposed amendment does not affect employment.

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

Real Estate Development Costs. The proposed amendment does 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 amendment does not significantly affect costs for small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed amendment does not significantly adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendment does not significantly adversely affect businesses.

Localities. The proposed amendments do not adversely affect localities.

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

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¹Data 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 replace definitions with a citation to § 54.1-4400 of the Code of Virginia.

18VAC5-22-40. Determining whether a person who holds a Virginia license is providing services to the public using the CPA title or to an employer using the CPA title.

For the purpose of determining whether a person who holds a Virginia license is providing services to the public using the CPA title or to an employer using the CPA title, as those terms are to be defined in accordance with § 54.1-4400 of the Code of Virginia, because of the written information readily available to the public through the board's Internet postings, holding a Virginia license constitutes using the CPA title. Accordingly, a person who holds a Virginia license:

1. Is providing services to the public using the CPA title if he provides services that are subject to the guidance of the standard-setting authorities listed in the standards of conduct and practice in subdivisions 5 and 6 of § 54.1-4413.3 of the Code of Virginia.

2. Is providing services to an employer using the CPA title if he provides to an entity services that require the substantial use of accounting, financial, tax, or other skills that are relevant, as determined by the board.