CPA Firms

Under 21 NCAC 08J .0108, all CPA firms, except professional corporations (PC), professional limited liability companies (PLLC), and registered limited liability partnerships (LLP), must register with the Board within 30 days after opening an office in North Carolina. Professional corporations, professional limited liability companies, and registered limited liability partnerships must register with the Board before forming the CPA firm. The North Carolina Office of the Secretary of State provides information on obtaining a professional business entity license for a CPA firm.

All information provided for CPA firm registration must pertain to the events and actions taken during the year preceding the year of registration. The last day of the preceding calendar year is considered the “year-end.” Although one representative of a CPA firm may file all registration documents for each of the CPA firm’s offices in North Carolina, the individual office supervisors or managers are responsible for compliance with the Board’s rules.

Under NCGS 93-10(c), Practice Privileges, a CPA firm that does not have its principal place of business or an office in North Carolina may be eligible to perform services to North Carolina clients without registering as a North Carolina firm. In exercising the practice privilege, the firm must comply with the laws, rules, and regulations of North Carolina and the Board, and is subject to the disciplinary authority of the Board.

However, if any individual with the firm exercises the individual practice privilege and performs, or offers to perform a financial statement audit or other engagement performed in accordance with the Statements on Auditing Standards; an examination of prospective financial information performed in accordance with the Statements on Standards for Attestation Engagements, or an engagement performed in accordance with the Public Company Accounting Oversight Board auditing standards, the firm must provide notice without a fee (Notice of Intent to Practice) to the Board.

Under 21 NCAC 08N .0307, CPA Firm Names, the following CPA firm names are permissible so long as they do not violate other firm name provisions:

• a firm name that includes the names or initials of one or more former or current owners;
• a firm name that excludes the names of one or more former or current owners;
• A firm name that uses the “CPA” title as part of the firm name when all named individuals are owners of the firm who hold the CPA title or are former owners who held the CPA title at the time they ceased to be owners of the firm; or
• A firm name that includes the name of a non-CPA owner if the words “certified public accountant” or “CPA” title are not a part of the firm name.

The Board does not regulate the naming conventions of business entities not registered with the Board. However, non-CPA firms may not use “CPA(s)” or “certified public accountant(s),” which may lead the public to think they are registered CPA firms.

21 NCAC 08N .0302 requires that

• A CPA who uses CPA in or with the name of the business or offers or renders audits, reviews, compilations, agreed-upon procedures, or engagement services performed in accordance with the standards in 21 NCAC 08A .0301(b)(5) in the public practice of accountancy to clients shall do so only through a registered sole proprietorship, partnership, Professional Corporation, Professional Limited Liability Company, or Registered Limited Liability Partnership.
• A CPA firm may have an ownership of up to 49 percent by non-CPAs. A CPA firm shall have ownership of at least 51 percent and be controlled in law and fact by holders of valid CPA certificates who have the unrestricted privilege to use the CPA title and to practice public accountancy in a jurisdiction and at least one of whom shall be licensed by this Board.
• A CPA shall not offer or render professional services through a CPA firm that is in violation of the registration requirements of 21 NCAC 08J .0108, 08J .0110, or 08M .0105.
• Every North Carolina office of a CPA firm registered in North Carolina shall be actively and locally supervised by a designated actively licensed North Carolina CPA whose primary responsibility and a corresponding amount of time shall be work performed in that office.
• A CPA firm and its designated supervising CPA shall be accountable for the following in regard to a CPA owner:
  • a CPA owner shall be a natural person or a general partnership or a limited liability partnership directly owned by natural persons;
  • a CPA owner shall actively participate in the business of the CPA firm; and
  • a CPA owner who, prior to January 1, 2006, is not actively participating in the CPA firm may continue as an owner until such time as his or her ownership is terminated.
• A CPA firm and its designated supervising CPA owner shall be accountable for the following in regard to a non-CPA owner:
  • a non-CPA owner shall be a natural person or a general partnership or limited liability partnership directly owned by natural persons;
  • a non-CPA owner shall actively participate in the business of the firm or an affiliated entity as his or her principal occupation;
  •  a non-CPA owner shall comply with all applicable accountancy statutes and the rules as set forth in G.S. 93 and all rules in this Chapter.
  • a non-CPA owner shall be of good moral character and shall be dismissed and disqualified from ownership for any conduct that, if committed by a licensee, would result in a discipline pursuant to G.S. 93-12(9); and
  • a non-CPA owner shall report his or her name, home address, phone number, social security number, and Federal Tax ID number (if any) on the CPA firm’s registration.

In addition to the initial CPA firm registration, all North Carolina CPA firms must renew their registration with the Board annually [21 NCAC 08J .0101]. One annual listing by a representative of a partnership, registered limited liability partnership, professional limited liability company, or professional corporation will satisfy the requirements of all partners or members of the CPA firm. If a CPA firm has dissolved or if any of the information provided to the Board during registration changes, the firm must notify the Board in writing within 30 days after the dissolution or change occurs. Not renewing a firm’s registration does not take the place of informing the Board that the firm is terminating its registration.

In 2023, the Board moved the annual firm renewal to its online portal; the renewal is through the portal only. The CPA firm supervisor will access the renewal using their individual portal account. Step-by-step instructions for setting up a portal account are available here. The Board anticipates that the firm renewal will be available in early December.

If a CPA firm fails to comply with any part of 21 NCAC 08J .0108 or 08J .0110 and continues to offer or render services, the Board may take disciplinary action against the CPA firm’s members. Such discipline may include:

• a $100.00 civil penalty for non-compliance of less than 60 days;
• a $200.00 civil penalty for non-compliance of at least 60 days but not more than 120 days;
• a $500.00 civil penalty per member for non-compliance of more than 120 days.

NOTE: Session Law 2023-134, Section 42.7.(a) repealed NCGS 105-41. However, the Board has not received confirmation from the NC Dept. of Revenue that the repeal is effective for taxable years on or after July 1, 2024.

Under NCGS 105-41, “Every person engaged in the public practice of accounting as a principal, or as a manager of the business of public accountant, shall pay for such [privilege] license fifty dollars ($50.00), and in addition shall pay a license of twelve dollars and fifty cents ($12.50) for each person employed who is engaged in the capacity of supervising or handling the work of auditing, devising or installing systems of accounts. Licenses issued under this section are issued as personal privilege licenses and shall not be issued in the name of a firm or corporation.” Please review the Opinion Letter issued by the Department of Revenue for an explanation of the privilege license as it relates to CPAs and CPA firms. Contact the NC Department of Revenue for privilege license requirement information.

Under 21 NCAC 08M, a CPA or CPA firm providing audits; reviews of financial statements; compilations of financial statements; or any engagements to be performed in accordance with the Statements on Standards for Attestation Engagements to the public must participate in an approved peer review program, or a program that substantially complies with the AICPA Standards for Performing and Reporting on Peer Reviews.

A CPA firm that does not have offices in North Carolina and has provided a financial statement audit or other engagement performed in accordance with the Statements on Auditing Standards [21 NCAC 08N .0403]; an examination of prospective financial information performed in accordance with the Statements on Standards for Attestation Engagements [21 NCAC 08N .0406]; or an engagement performed in accordance with the Public Company Accounting Oversight Board auditing standards to North Carolina clients must participate in a peer review program. [G.S. 93-10(c)(3)]

Within 30 days of issuing any of the reports listed above to a client, a CPA or CPA firm must register with the AICPA Peer Review Program. Coastal Peer Review, Inc. administers the AICPA Peer Review Program for all CPA firms in North Carolina that do not provide services to publicly traded companies. To enroll in the AICPA Peer Review Program, please contact Coastal Peer Review, Inc., by telephone at 800-730-34126 or by email.

A CPA firm registered for peer review must provide the Board with the following:

• peer review due date;
• year-end date;
• Final Letter of Acceptance from the peer review program within 60 days of the date of the letter; and
• A package that includes the Peer Review Report, Letter of Response, and Final Letter of Acceptance for all failed and second passed with deficiencies modified reports issued by a peer review program within 60 days of the date of the Final Letter of Acceptance.

A peer review is not complete until the peer review program issues the Final Letter of Acceptance with the new peer review date. If a CPA firm required to participate in a peer review program does not comply with 21 NCAC 08M .0105(c), (d), or (g), the Board may take disciplinary action against the CPA firm’s members. The disciplinary action may include a suspension of each member’s CPA certificate for at least 30 days and a civil penalty of up to one thousand dollars ($1,000).

A CPA or CPA firm that does not provide any of the services listed above is exempt from peer review until the CPA or CPA firm issues the first such report to a client. If a CPA, a new CPA firm, or a CPA firm currently exempt from peer review starts providing any of the services listed above, they must furnish the peer review program with selected financial statements, corresponding work papers, and any additional information or documentation required for the peer review program within 18 months of issuing the first report to a client.

The Board does not grant extensions to complete the peer review. Firms participating in the AICPA Peer Review program that need an extension must contact Coastal Peer Review, Inc., by telephone at 800-730-34126 or by email.

All CPA firms enrolled in the AICPA Peer Review Program must also participate in the AICPA Facilitated State Board Access Program.

Please review the AICPA Peer Review Program FAQs for more information about the AICPA peer review program.

CPA firms must notify the Board about all changes to the firm name, opening of additional office locations, changes in firm ownership, etc. Please contact Cammie Emery for more information about reporting these changes to the Board.

 21 NCAC 08J .0107 requires CPA firms to notify the Board in writing of any change in mailing address, physical address, practice address, phone number, email address, website address, etc., within 30 days of the change. To change a firm’s address online, enter the firm number and the certificate number of the supervising CPA of record. Please contact Cammie Emery to obtain the firm number. Address changes made with the NCACPA, AICPA, or other professional organizations do not update the address information on file with the Board. Email addresses are not public record information.