288 Neb. Admin. Code, ch. 5, § 007

Current through September 17, 2024

Section 288-5-007 - Other Responsibilities and Practices

007.01 Acts discreditable

A licensee shall not commit an act that reflects adversely on his fitness to engage in the practice of public accountancy.

007.02 Commissions and referral fees

007.02AProhibited Commissions. A licensee in public practice shall not for a commission recommend or refer to a client any product or service, or for a commission recommend or refer any product or service to be supplied by a client, or receive a commission, when the licensee or the licensee's firm also performs for that client:

007.02A1 an audit or review of a financial statement; or

007.02A2 a compilation of a financial statement when the licensee expects, or reasonably might expect, that a third party will use the financial statement and the licensee's compilation report does not disclose a lack of independence; or

007.02A3 an examination of prospective financial information.

This prohibition applies during the period in which the licensee is engaged to perform any of the services listed above and the period covered by any historical financial statements involved in such listed services.

007.02BDisclosure of Permitted Commissions. A licensee in public practice who is not prohibited by this rule from performing services for or receiving a commission and who is paid or expects to be paid a commission shall provide written disclosure of that fact and the basis for determining such commission to any person or entity to whom the licensee recommends or refers a product or service to which the commission relates.

007.02CReferral Fees. Any licensee who accepts a referral fee for recommending or referring any service of a CPA to any person or entity or who pays a referral fee to obtain a client shall provide written disclosure of such acceptance or payment and the basis for determining such fee to the client.

007.02DWritten Disclosure Statements. Written disclosure statements, as set forth by Attachment 1 to this Chapter, are to be executed in duplicate, with a receipt acknowledgement signed and dated by the client, and maintained by the licensee for a period of five years. Licensees are subject to a random audit by the Board or its designee for compliance with the written disclosure provisions of this rule.

007.02EDisclosure Form for commission, contingent fee, or referral fee.

COMMISSION, CONTINGENT FEE OR REFERRAL FEE DISCLOSURE

This written disclosure form is required by the Nebraska Board of Public Accountancy for use by duly licensed Certified Public Accountants (CPA's) who intend to accept from any client compensation in the form of a commission, a contingent fee or a referral fee. CPA's are prohibited from accepting a commission or contingent fee as compensation from a client for whom the CPA or the CPA's firm also performs:

1) an audit or review of a financial statement; or

2) a compilation of a financial statement when the CPA expects, or reasonably might expect, that a third party will use the financial statement and the CPA's compilation report does not disclose a lack of independence; or

3) an examination of prospective financial information.

A CPA also cannot prepare an original or amended tax return or claim for a tax refund for a contingent fee for any client. Except as stated in the next sentence, a contingent fee is a fee established for the performance of any service pursuant to an arrangement in which no fee will be charged unless a specified finding or result is attained, or in which the amount of the fee is otherwise dependent upon the finding or result of such service. Solely for purposes of this rule, fees are not regarded as being contingent if fixed by courts or other public authorities, or, in tax matters, if determined based on the results of judicial proceedings or the findings of governmental agencies.

Any CPA who accepts a commission, contingent fee or referral fee or expects to be paid in such a manner shall provide written disclosure of such acceptance or payment and the basis for determining such fee to the client.

BASIS FOR DETERMINING FEE:

_____________________________________________________________________________________

_____________________________________________________________________________________

__________________________________________________

Further, you are hereby informed that as a client of my firm or myself, I may have access to confidential financial information that would not otherwise be available to me if a client relationship did not exist prior to my solicitation of business. Your receipt of this disclosure constitutes your full understanding of the relationship between me, my firm, and you as a client.

Offered by:Accepted by:

__________________________________________________________________

PRINTED NAME OF CPAPRINTED NAME OF CLIENT(S)

___________________________ _ ____ ______________________________________

CERTIFICATE #SIGNATURE OF CLIENT(S)

__________________________ __ _____ ______________________________________

DATEDATE

This form is to be executed in duplicate with one copy to be presented to the client at the time of signature. The CPA is required to maintain this form in their files for a minimum of five years and is subject to a random audit by the Board or its designee for compliance with written disclosure provisions. Questions on this form or the above prohibitions and conditions should be directed to the Nebraska Board of Public Accountancy, P.O. Box 94725, Lincoln, NE 68509, (402) 471-3595.

007.03 Form of Practice and Name

A licensee may practice public accountancy, whether as an owner or employee, only in the form of a proprietorship, a partnership, a professional corporation, a limited liability company or any other permissible form of practice. A licensee shall not practice under a firm name which includes any name that would have the capacity or tendency to deceive or mislead or is misleading as to the type of organization (proprietorship, partnership, professional corporation, limited liability company or other permissible form of practice). Fictitious names are not precluded from consideration under this rule. However, names of one or more past partners, shareholders or limited liability company members may be included in the firm name of a successor partnership, corporation, limited liability company or other permissible successor business entity. A firm name is deemed misleading if it includes the name of a person who is not a CPA. A firm name is deemed misleading if it includes the terms "& Associates," "& Company," or "Group," or similar plural terms, if the firm has only one individual practicing in the firm with a current permit to practice as a CPA. A permit holder surviving the death or withdrawal of all other permit holders may continue to practice under the firm name for up to two years after becoming the sole practicing permit holder in the firm.

Any CPA firm that has continuously used an assumed name approved by the Board prior to July 19, 2005 may continue to use the assumed name, so long as the CPA firm is only owned by an individual practitioner, partner, or shareholder, who obtained such Board approval.

007.04 Professional Corporations

A corporation registered under Section 1-134 of the Act and any corporation granted a permit under Section 1-136 of the Act shall be subject to the Rules of Professional Conduct. Any shareholder who ceases to be eligible to be a shareholder shall be required to dispose of all of his or her shares within a reasonable period to a person qualified to be a shareholder or to the corporation. The principal executive officer of a professional corporation licensed in Nebraska to practice public accounting shall be a shareholder and a director who is a licensed certified public accountant. Directors and officers who are not licensees shall not exercise any authority whatsoever over professional matters relating to the practice of public accountancy.

007.05 Communications

Any requested response to a communication from the Board shall be within thirty (30) calendar days of the receipt of the communication.

007.06 Obligation of certificate holders to notify the Board of changes of address and other information

Each certificate holder shall notify the Board in writing within thirty days of any change of address or change of employment.

288 Neb. Admin. Code, ch. 5, § 007