Academic journal article Journal of Accountancy

NASBA Issues Guidance on Non-CPA Ownership

Academic journal article Journal of Accountancy

NASBA Issues Guidance on Non-CPA Ownership

Article excerpt

The board of directors of the National Association of State Boards of Accountancy has approved guidelines for state boards that decide to allow nonlicensee ownership of CPA firms. The board did not take a stand on the controversial issue, however.

The requirements for firms with non-CPA owners are similar to those adopted by the American Institute of CPAs at its spring 1994 council meeting, which allow non-CPA ownership of CPA firms under certain conditions.

The NASBA guidelines

Jurisdictions that permit nonlicensee ownership should consider setting the following requirements:

1. The attest function must remain under a licensee's control. The firm's chief executive officer, as well as the person in charge of each office performing financial statement attest and compilation services and other engagements governed by the American Institute of CPAs statements on auditing standards or statements on standards for accounting and review services, must be a licensee.

2. The nonlicensee owner must be an individual who is actively engaged in providing services to the firm's clients as a primary occupation and must be the legal owner of his or her equity capital. …

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