Tenn. Comp. R. & Regs. 0020 — Accountancy

Chapter 0020-01 Licensing and Registration Requirements

Tenn. Comp. R. & Regs. 0020-01-.01 DEFINITIONS

(1) Unless otherwise stated, as used in this chapter and each subsequent chapter of the Rules of the State Board of Accountancy:

(a) “Act” means the Tennessee Accountancy Act of 1998, Tenn. Code Ann. §§ 62-1-101 et seq.;

(b) “Accounting service” means accounting, attest, tax, consulting or management advisory services;

(d) “Attest” shall be defined as in Tenn. Code Ann. § 62-1-103;

(e) “Board” shall be defined as in Tenn. Code Ann. § 62-1-103;

(f) “Certificate” shall be defined as in Tenn. Code Ann. § 62-1-103;

(g) “CPA” means “Certified Public Accountant” and shall be defined as in Tenn. Code Ann. § 62-1-103;

(h) “Expired License” means a license that is more than six months past the expiration date of the license;

(i) “Financial statements” means statements, footnotes and other supplementary information related thereto that undertake to present an actual or anticipated financial position as of a point in time, or results of operations, cash flow, or changes in financial position for a period of time, in conformity with generally accepted accounting principles or another comprehensive basis of accounting. The term does not include incidental financial data included in management advisory service reports to support recommendations to a client; nor does it include tax returns and supporting schedules;

(j) “License” means a certificate issued under T.C.A. § 62-1-107, a permit issued under T.C.A. § 62-1-108, or a registration under T.C.A. § 62-1-109, or, in each case, a certificate, license, or permit issued under corresponding provisions of prior law;

(k) “Member” means member in a limited liability company;

(l) “NASBA” means the National Association of State Boards of Accountancy;

(m) “Permit” means a permit to practice as a CPA or PA firm issued under §§ 62-1-108, 62- 1-109 or corresponding provisions of prior law;

(n) “Partnership” or “Corporation” shall include any form of business organization authorized under the laws of this or any other state;

(o) “Practice of public accountancy” means providing or offering to provide attest services to the public, or using the titles “certified public accountant,” “public accountant,” “CPA,” or “PA”;

(p) “Professional service” means any service performed or offered by a licensee for a client in the course of the practice of public accountancy;

(q) “PA” means “Public Accountant” and shall be defined as in Tenn. Code Ann. § 62-1- 103;

(r) “Registration” shall be defined as in Tenn. Code Ann. § 62-1-103;

(s) “Report” shall be defined as in Tenn. Code Ann. § 62-1-103. This term, as defined in Tenn. Code Ann. § 62-1-103 of the Act and used in Tenn. Code Ann. § 62-1-108 of the Act, and in these Rules, includes forms of language contained in a report which refers to financial statements or other information, when such forms of language express or deny any assurance as to the reliability of the financial statements or other information to which it refers. Among the possible sources of such forms of language are pronouncements by authoritative bodies recognized by the Board describing the work that should be performed and/or the responsibilities that should be assumed, for specified kinds of professional engagements, and in addition prescribing the form of report which should be issued upon completion of such engagements. A form of report prescribed by such a pronouncement will ordinarily constitute a form of language which is conventionally understood as implying assurance and expertise;

(t) “Resident manager” means a licensee designated by a firm to be responsible for an office location’s compliance with the Act and the rules of the Board. A resident manager may be the resident manager of multiple office locations. Each office location must have a CPA resident manager, with responsibility for that office, whether that manager is an owner in the firm or not.

History

Authority: T.C.A. §§ 62-1-103, 62-1-105, 62-1-105(e), 62-1-108, 62-1-111(a), and 62-1-111(a)(12) and Chapter No. 443 of the Public Acts of 1989, Sections 9 and 12.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed August 5, 1991; effective September 19, 1991. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed March 26, 2012; effective June 24, 2012. Amendments filed August 12, 2016; effective November 10, 2016. Amendments filed February 23, 2018; effective May 24, 2018.

Tenn. Comp. R. & Regs. 0020-01-.02 BOARD MEETINGS

(1) The Board shall meet at least four (4) times each year. The chair or a quorum of the Board shall have the authority to call meetings of the Board. The Board shall follow and apply the rules of the Administrative Procedures Act of the State of Tennessee regarding notice and conduct of meetings.

History

Authority: T.C.A. §§ 62-1-105(e)(1) and 62-1-111(a)(12), and Chapter No. 443 of the Public Acts of 1989, Sections 9 and 12.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed April 20, 1994; effective July 4, 1994. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-01-.03 BOARD OFFICERS

(1) The Board shall elect annually from among its members a chair, vice-chair, secretary and such other officers as the Board may require. The officers shall assume the duties of their respective offices at the conclusion of the meeting at which they were elected.

(2) The chair, or in the event of the chair’s absence or inability to act, the vice-chair, shall preside at all meetings of the Board. The Board shall determine other duties of the officers.

History

Authority: T.C.A. §§ 62-1-105(e)(1) and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed May 13, 1991; effective June 27, 1991. Amendment filed April 20, 1994; effective July 4, 1994. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-01-.04 FEES

(1) Fees charged by the Board shall be as follows:

(a) Initial issuance of certificate One hundred dollars ($100.00)

(b) Replacement certificate Twenty-five dollars ($25.00)

(c) Renewal of certificate or registrationOne hundred ten dollars ($110.00) biennially (d) Initial firm permit Fifty dollars ($50.00)

(e) Renewal of firm permit Fifty dollars ($50.00) per year (f) Fee for late filing of permit, certificate, or registration renewal applicationOne hundred dollars ($100.00)

(g) Fee for application for reinstatementTwo hundred and fifty dollars ($250.00)

(h) Transfer of grades or letter of good standing Twenty-five dollars ($25.00) per request (i) Change of address late fee Twenty-five dollars ($25.00)

History

Authority: T.C.A. §§ 62-1-105 and 62-1-107.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed June 30, 1988; effective August 14, 1988. Amendment filed August 5, 1991; effective September 19, 1991. Amendment filed April 20, 1994; effective July 4, 1994. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed August 15, 2006: effective October 29, 2006. Amendment filed March 26, 2012; effective June 24, 2012. Amendment filed December 11, 2013; effective March 11, 2014. Amendments filed October 28, 2016; effective January 26, 2017.

Tenn. Comp. R. & Regs. 0020-01-.05 APPLICATIONS

(1) Applications to take the Certified Public Accountant Examination must be made on a form provided by the Board or its designee and filed with the Board or its designee by a due date specified by the Board or its designee in the application form. All applications for initial examination or reexamination shall be accompanied by the current fee being charged by the Board or such entity as is approved by the Board.

(2) An application will not be considered filed until the application fee and examination fee required by these rules and all required supporting documents have been received, including proof of identity as determined by the Board and specified on the application form, official transcripts and proof that the candidate has satisfied the education requirement.

(3) A candidate who fails to appear for the examination shall forfeit all fees charged for both the application and the examination. All applications for initial licensure shall expire one (1) year from the date of the application for initial licensure.

(4) The Board or its designee will forward notification of eligibility for the computer-based examination to NASBA’s National Candidate Database.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-106.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed August 5, 1991; effective September 19, 1991. Amendment filed April 20, 1994; effective July 4, 1994. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed August 15, 2006; effective October 29, 2006. Amendment filed December 11, 2013; effective March 11, 2014.

Tenn. Comp. R. & Regs. 0020-01-.06 EXAMINATIONS

(1) The examination required by T.C.A. § 62-1-106(d) shall test the knowledge and skills required for performance as an entry-level certified public accountant. The examination shall include the subject areas of accounting and auditing and related knowledge and skills as the Board may require.

(2) Eligible candidates shall be notified of the time and place of the examination or shall independently contact the Board, or its designee, or a test center operator identified by the Board to schedule the time and place for the examination at an approved test site.

Scheduling reexaminations must be made in accordance with (6)(a) below.

(3) The Board shall cause the examination for certification to be graded by the AICPA. The Board may recognize the grades assigned by the AICPA. Applicants may request a grade review if the Board permits such, and the applicant pays whatever administrative charges that are assessed for a grade review.

(4) A candidate shall be required to pass all test sections of the examination provided for in T.C.A. § 62-1-106(d) in order to qualify for a certificate. The uniform passing grade shall be established through a psychometrically acceptable standard-setting procedure and approved by the Board.

(5) The notification given to the exam candidate regarding the grades and requirements that the candidate must achieve to pass a particular exam shall govern the grading of that exam.

(6) The following shall apply to the computer-based Uniform CPA Examination:

(a) A candidate may take the required test sections individually and in any order. Credit for passing any test section shall be valid for that test section for thirty (30) months from the date the passing score for such test section is released by NASBA to the candidate or the Board, as the case may be, regardless of the number of test sections taken or having to attain a minimum score on any failed section(s).

A candidate shall pass all required test sections within a rolling thirty (30) month period. The rolling thirty (30) month period begins on the date the first passing score(s) are released by NASBA to the candidate or the Board, as the case may be. The rolling thirty (30) month period concludes on the date the candidate sits for the final test section passed, regardless of when the score is released by NASBA for the final test section.
A candidate who earns initial credit on one or more test section(s) of the CPA examination must sit for and complete the remaining required test section(s) of the examination on or before the expiration date as shown on the Uniform CPA Examination score notice.
If all required test sections are not passed within this initial thirty (30) month period, credit for the first test section(s) passed shall expire and a new rolling thirty (30) month period shall begin on the date the second passing score(s) were released by NASBA to the candidate or the Board, as the case may be, and continue for thirty (30) months from that date. If all required test section(s) are not passed within this next rolling thirty (30) month period, credit for the second test section(s) passed shall expire and a new rolling thirty (30) month period will begin on the date the next test section passing score, if any, was released by NASBA to the candidate or the Board, as the case may be, and this cycle of thirty (30) months rolling periods and test section credit expirations will continue until all test sections are passed within one thirty (30) month rolling period.

Notwithstanding the foregoing, if a candidate stops testing for a thirty (30) month period, then all credit for previously passed test sections will expire.

(b) A candidate shall not retake a failed test section until the candidate has been notified of the score for the most recent attempt of that failed test section.

(c) A candidate shall be deemed to have passed the examination if the candidate obtains credit for passing all required test sections in one rolling thirty (30) month period.

(d) A candidate shall retain credit for any and all required test sections of the examination passed as a candidate of another state if such credit would have been given under then applicable requirements in this state.

(e) Notwithstanding subsections (a), (b), and (c) of this Rule, the period of time in which to pass all required test sections of the examination may be extended by the Board upon a showing that the credit was lost by reason of individual hardship including, but not limited to, health; military service; disruption at a local, regional, or national level impacting the candidate; or other circumstances beyond the candidate’s control.

(7) An applicant may be required to pass an examination covering the rules of ethics and professional conduct promulgated by the Board. Such examination may be part of the examination required in T.C.A. § 62-1-106(d) or may be a separate examination.

(8) The Board may provide for a third party administering the examination to charge each applicant a fee for each section of the examination or reexamination taken by the applicant.

(9) The candidate shall schedule each test section with the Board or its designee and pay a candidate testing fee that includes the actual fees charged by the AICPA, NASBA, and the Test Delivery Service Provider.

(10) Notwithstanding any other provisions under these rules, the Board may postpone scheduled examinations, release of grades, or the issuance of certificates due to a breach of examination security, unauthorized acquisition or disclosure of the contents of an examination, suspected or actual negligence, errors, omissions, or irregularities in conducting an examination, or for any other reasonable cause or unforeseen circumstance.

(11) A candidate who applies for a license more than ten (10) years after the date upon which the candidate passed the last section of the Uniform CPA Examination must also document eighty (80) hours of continuing professional education in technical fields of study earned within the twenty-four (24) months immediately preceding the date of application. Of the eighty (80) hours required, at least two (2) hours shall consist of a board-approved statespecific ethics course.

Qualifying continuing professional education is found in rule 0020-05- .04.

(12) Candidates who have been ordered to military service shall receive an automatic extension on any CPA examination credits, in order to complete the examination requirements of paragraph (6) of this rule, for the length of time that the candidate was ordered to military service.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-106.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed June 3, 1983; effective July 5, 1983. Amendment filed April 20, 1994; effective July 4, 1994. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed January 24, 2003; effective April 9, 2003. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed August 15, 2006; effective October 29, 2006. Amendment filed March 26, 2012; effective June 24, 2012. Amendment filed December 11, 2013; effective March 11, 2014. Amendments filed October 28, 2016; effective January 26, 2017. Amendments filed October 17, 2019; effective January 15, 2020. Amendments filed February 28, 2024; effective May 28, 2024.

Tenn. Comp. R. & Regs. 0020-01-.07 CHEATING

(1) Cheating by a candidate in applying for, taking or subsequent to the examination invalidates any grade otherwise earned by a candidate on any test section of the examination, and may warrant summary expulsion from the test site and disqualification from taking the examination for a specified period of time.

(2) For purposes of this rule, the following actions or attempted activities, among others, may be considered cheating:

(a) Falsifying or misrepresenting educational credentials, candidate identification, or other information required for admission to the examination;

(b) Communication between candidates inside or outside the test site or copying another candidate’s answers while the examination is in progress;

(d) Substitution of another person to sit in the test site instead of a candidate;

(e) Reference to crib sheets, text books or other material or electronic media (other than that provided to the candidate as part of the examination) inside or outside the test site while the examination is in progress;

(f) Violating the nondisclosure prohibitions of the examination or aiding or abetting another in doing so;

(g) Retaking or attempting to retake a test section by an individual holding a valid certificate or by a candidate who has unexpired credit for having already passed the same test section, unless the individual has been directed to retake a test section pursuant to Board order or unless the individual has been expressly authorized by the Board to participate in a “secret shopper” program.

(3) In any case where it appears that cheating has occurred or is occurring, the Board or its representatives may either summarily expel the candidate involved from the examination or move the candidate to a position in the test center away from other examinees where the candidate can be watched more closely.

(4) In any case where the Board believes that it has evidence that a candidate has cheated on the examination, including those cases where the candidate has been expelled from the examination, the Board shall conduct an investigation and may conduct a hearing following the examination session for the purpose of determining whether or not there was cheating, and if so what remedy should be applied. In such proceedings, the Board shall decide:

(a) Whether the candidate shall be given credit for any portion of the examination completed in that session; and (b) Whether the candidate shall be barred from taking the examination, and if so, for what period of time.

(5) In any case where the Board or its representative permits a candidate to continue taking the examination, it may, depending on the circumstances:

(a) Admonish the candidate;

(b) Keep a record of the candidate’s seat location and identifying information, and the names and identifying information of the candidates in close proximity of the candidate;

(c) Notify the National Candidate Database and the AICPA and/or the test center of the circumstances, so that the candidate may be more closely monitored in future examination sessions.

(6) In any case where a candidate is refused credit for any part of the examination taken, or is disqualified from taking other parts, the Board shall provide the candidate with a written statement containing its findings.

(7) In any case in which a candidate is refused credit for any test section of an examination taken, disqualified from taking any test section, or barred from taking the examination in the future, the Board will provide to the Board of Accountancy of any other state to which the candidate may apply for the examination, information as to the Board’s findings and actions taken.

History

Authority: T.C.A. § 62-1-105.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed May 13, 1991; effective June 27, 1991. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-01-.08 RENEWAL OF LICENSES

(1) Each holder of a certificate as a certified public accountant or a registration as a public accountant shall be required to renew such certificate or registration biennially.

(2) An individual or firm choosing not to renew his, her, or its license shall notify the Board of his, her, or its intention prior to the expiration of that license.

(3) Applications for the renewal of certificates and registrations pursuant to the Act shall be made on a form provided by the Board and shall be filed no later than the expiration date set by these rules. Applications will not be considered filed until the applicable fee prescribed in these rules is received.

(4) Applications for renewal of certificates or registrations shall be accompanied by evidence satisfactory to the Board that the applicant has complied with the continuing professional education requirements under T.C.A. § 62-1-107(d) and Chapter 0020-05 of the Board’s rules.

(5) The Board may request additional evidence from licensees for continuing professional education requirements including continuing professional education audits (which require CPE course completion documentation).

(6) Licenses which are between one day and six (6) months past the expiration date shall be considered delinquent. Licenses which are renewed between thirty-one (31) days and six (6) months following their expiration date will be assessed a late fee in the amount of onehundred dollars ($100.00).

(7) Licenses which are more than six (6) months past the expiration date shall be deemed to have expired. Any individual wishing to reinstate an expired license shall comply with paragraph (4) of this rule and paragraph (6) of rule 0020-05-.03. The CPE hours required to be completed to reinstate an expired license are considered penalty hours and may not be used to offset the CPE hours required for the renewal of a license.

(8) An applicant for licensure meeting the requirements of T.C.A. § 4-3-1304(d)(1) may:

(a) Be issued a license under this chapter upon application and payment of all fees required for issuance of a regular license of the same type if, in the opinion of the Board, the requirements for certification or licensure in the state where the applicant is licensed are substantially equivalent to that required in Tennessee; or (b) Be issued a temporary permit as described herein if the Board determines that the applicant’s license does not meet the requirements for substantial equivalency, but that the applicant could perform additional acts, including—but not limited to—education, training, or experience, in order to meet the requirements for the license to be substantially equivalent. The Board may issue a temporary permit upon application and payment of all fees required for issuance of a regular license of the same type, which shall allow such person to perform services as if fully licensed for a set period of time that is determined to be sufficient for the applicant to complete such requirements.

After completing those additional requirements and providing the Board with sufficient proof thereof as may be required, a full license shall be issued to the applicant with an issuance date of the date of the original issuance of the temporary permit and an expiration date as if the full license had been issued at that time.
A temporary permit shall be issued for a period of less than the length of a renewal cycle for a full license.
A temporary permit shall expire upon the date set by the Board and shall not be subject to renewal except through the completion of the requirements for substantial equivalency as required by the Board or by an extension of time granted for good cause by the Board.
Should an extension to a temporary permit cause the permit to be in effect longer than the renewal cycle of a full license, the holder of the temporary permit shall file a renewal application with such documentation and fees, including completion of continuing education, as are required by the Board for all other renewals of a full license of the same type.

(9) Military education, training, or experience completed by a person described at T.C.A. § 4-3- 1304(d)(1)(B)(ii)(a)-(c) shall be accepted toward the qualifications, in whole or in part, to receive any license issued by the Board if such military education, training, or experience is determined by the Board to be substantially equivalent to the education, training, or experience required for the issuance of such license.

(10) Any licensee who is a member of the National Guard or a reserve component of the armed forces of the United States called to active duty whose license expires during the period of activation shall be eligible for renewal for a period of six (6) months after the licensee is released from active duty without:

(a) Payment of late fees or other penalties;

(b) Obtaining continuing education credits when:

Circumstances associated with the person’s military duty prevented the obtaining of continuing education credits and a waiver request has been submitted to the Board; or 2. The person performs the licensed or certified occupation as part of such person’s military duties and provides documentation sufficient to demonstrate such to the Board, or;

(11) Any person renewing under paragraph (10) shall provide the Board such supporting documentation evidencing activation as may be required by the Board prior to renewal of any license pursuant to that paragraph.

History

Authority: T.C.A. §§ 4-3-1304, 62-1-105, 62-1-107, 62-1-108, 62-1-109, 62-1-111, and 56-1-302.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed May 13, 1991; effective June 27, 1991. Amendment filed April 20, 1994; effective July 4, 1994. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed October 17, 2003; effective December 31, 2003 Amendment filed August 15, 2006; effective October 29, 2006. Amendment filed March 13, 2007; effective May 27, 2007. Amendment filed March 26, 2012; effective June 24, 2012. Amendment filed February 11, 2015; effective May 12, 2015. Amendments filed August 12, 2016; effective November 10, 2016. Amendments filed October 28, 2016; effective January 26, 2017.

Tenn. Comp. R. & Regs. 0020-01-.09 DENIAL OF CERTIFICATE

(1) An applicant denied a certificate shall be notified in writing by the Board of such denial and the reasons therefore. Such applicant may request an appearance before the Board to reconsider such denial at its next scheduled meeting. Such request shall be sent to the Executive Director within thirty (30) days of the date of the notice of denial.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111(a)(12).
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-01-.10 REINSTATEMENT OF REVOKED OR SUSPENDED LICENSES

(1) A certified public accountant or public accountant whose license has been revoked or suspended and who wishes to reinstate the license shall submit to the Board an application for reinstatement of such license accompanied by the appropriate fee.

(2) Such application shall consist of a signed and acknowledged petition which shall set forth in full the circumstances surrounding the revocation or suspension of the applicant’s license, the applicant’s reasons for seeking reinstatement, and any other information the applicant wishes to bring to the attention of the Board.

(3) Such application shall be submitted to the Board at its next meeting and evaluated and reviewed for presentation at the following meeting.

(4) In considering an application the Board may consider all activities of the applicant since the revocation or suspension was imposed, the offense for which the applicant was disciplined, the applicant’s activities during the time the license was in good standing, the applicant’s rehabilitative efforts, the applicant’s restitution to damaged parties in the matter for which the discipline was imposed, and the applicant’s general reputation for truth and professional probity. The Board may also question the applicant, complainant or individual injured by the applicant.

(5) After consideration of the applicant’s petition, the Board may in its sound discretion reinstate any revoked or suspended license. The Board shall notify such applicant of its decision in writing.

(6) The Board may impose appropriate terms and conditions for reinstatement of a license or modification of a revocation, suspension or probation.

(7) No application for reinstatement will be considered while the applicant is under sentence for any criminal offense, including any period during which the applicant is on court imposed probation or parole.

(8) A certified public accountant or public accountant whose license has been suspended must meet all continuing professional education and renewal fee requirements during the term of the suspension.

History

Authority: T.C.A. §§ 62-1-105, 62-1-107, and 62-1-118.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-01-.11 APPLICATION AND RENEWAL OF CPA AND PA FIRM PERMITS

(1) Each sole proprietorship, corporation, partnership or other form of organization providing attest services to the public or using the title “CPAs,” “CPA firm,” “PAs,” or “PA firm” shall obtain a permit from the Board for each office location for the ensuing calendar year.

Applications for initial issuance and for renewal of permits shall be made on a form provided by the Board and, in the case of applications for renewal, shall be filed no earlier than two (2) months prior to and no later than the expiration date.

(2) All CPA and PA firm permits shall expire annually on December 31. Initial applications and renewals will not be considered filed until the applicable fee and all required documents prescribed in these Rules are received by the Board. If an application for renewal is filed late, it shall also be accompanied by the appropriate late renewal penalty.

(3) Initial applications and renewals for each office location shall disclose the following information and shall be signed by the resident manager of the office location.

(a) The name of the firm;

(b) The firm’s organizational structure;

(d) The name and address of each individual with an equity or voting interest in the firm;

(e) A listing of the percentage of equity ownership and voting rights of each owner of the firm;

(f) The percentage of the firm’s normal business hours that each non-CPA owner spends working at the firm;

(g) The name, address, and certificate number of each certified public accountant or public accountant employed at the office location;

(h) The name, address and certificate number of the resident manager of the office location;

(i) The name and certificate number of each person responsible for supervising or providing attest services as contemplated by T.C.A. § 62-1-108(c)(2). The firm’s initial application must include a completed experience affidavit for each of these individuals; and (j) The type of peer review program in which the firm participates along with proof of compliance in a manner acceptable to the board.

(4) Every office location shall comply with the current statutes and rules of the Tennessee State Board of Accountancy.

(5) This rule is applicable to offices located outside of this state where such offices are engaged in the practice of public accountancy as CPA firms in this state through any person(s) holding a reciprocal certificate.

History

Authority: T.C.A. §§ 62-1-103, 62-1-105, 62-1-108, 62-1-111, and 62-1-113.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed May 13, 1991; effective June 27, 1991. Amendment filed February 8, 1993; effective March 25, 1993. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006. Amendments filed August 12, 2016; effective November 10, 2016.

Tenn. Comp. R. & Regs. 0020-01-.12 NOTIFICATION OF FIRM CHANGES

(1) Firms established pursuant to T.C.A. §§ 62-1-108 and/or 62-1-109 shall file with the Board a written notification of any of the following events concerning the practice of public accountancy within this State within thirty (30) days after its occurrence:

(a) Formation of a new firm;

(b) Addition of a partner, member or shareholder;

(d) Any change in the name of the firm;

(e) Dissolution of the firm;

(f) Change in the management of any office location registered in this State;

(g) Establishment of a new office or location engaged in the practice of public accountancy in this State or the closing or change of address of an office location registered in this State; and (h) The occurrence of any event or events which would cause such firm not to be in conformity with the provisions of the Act or these Rules.

History

Authority: T.C.A. §§ 62-1-105, 62-1-108, 62-1-111, and 62-1-113.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Repeal filed December 1, 1987; effective January 15, 1988. Original rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006. Amendments filed August 12, 2016; effective November 10, 2016.

Tenn. Comp. R. & Regs. 0020-01-.13 INTERSTATE PRACTICE

(1) These rules provide two distinct routes for an individual already licensed in another state to be authorized to practice in this state. The applicable route depends upon whether the individual will establish a principal place of business in this state. An individual establishing a principal place of business in this state may qualify for a reciprocal license if the applicant has met the requirements of T.C.A. § 62-1-107. An individual with a principal place of business in another state may offer or render services in this state if the applicant has met the requirements of T.C.A. § 62-1-117.

(2) Fees (a) An application for a reciprocal certificate shall be accompanied by a fee of one hundred dollars ($100.00).

(b) The fee for issuance of an initial reciprocal certificate shall be one hundred dollars ($100.00).

(3) Holders of reciprocal certificates shall comply with the continuing education requirements contained in Chapter 0020-05, and shall comply with all other requirements of the statutes and rules governing the practice of public accountancy within the State of Tennessee.

(4) Any Tennessee licensee who lives in another state and who wishes to practice accountancy under this chapter must maintain his or her Tennessee license in good standing in order to do so.

History

Authority: T.C.A. §§ 62-1-105, 62-1-107, 62-1-110, 62-1-111, 62-1-113, 62-1-114, and 62-1-117.
Administrative History: Original rule filed June 9, 1981; effective August 17, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed May 13, 1991; effective June 27, 1991. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed August 15, 2006; effective October 29, 2006. Amendment filed March 26, 2012; effective June 24, 2012. Amendments filed October 28, 2016; effective January 26, 2017.

Tenn. Comp. R. & Regs. 0020-01-.14 INTERNATIONAL RECIPROCITY

(1) The Board may designate a professional accounting credential issued in a foreign country as substantially equivalent to a CPA certificate.

(a) The Board may rely on the International Qualifications Appraisal Board for evaluation of foreign credential equivalency.

(b) The Board may accept a foreign accounting credential in partial satisfaction of its domestic credentialing requirements if:

The holder of the foreign accounting credential met the issuing body’s education requirement and passed the issuing body’s examination used to qualify its own domestic candidates; and 2. The foreign credential is valid and in good standing at the time of application for a domestic credential.

(2) The Board may satisfy itself through qualifying examination(s) that the holder of a foreign credential deemed by the Board to be substantially equivalent to a CPA certificate possesses adequate knowledge of U.S. practice standards and the Board’s regulations. The Board may rely on the National Association of State Boards of Accountancy, the American Institute of Certified Public Accountants, or other professional bodies to develop, administer, and grade such qualifying examination(s). The Board will specify the qualifying examination(s) and process by policy.

(3) An applicant for renewal of a CPA certificate originally issued in reliance on a foreign accounting credential shall:

(a) Make application for renewal at the time and in the manner prescribed by the Board for all other certificate renewals;

(b) Pay such fees as are prescribed for all other certificate renewals;

(c) If the applicant has a foreign credential in effect at the time of the application for renewal of the CPA certification, he/she must present documentation from the foreign accounting credential issuing body that the applicant’s foreign credential has not been suspended or revoked and the applicant is not the subject of a current investigation. If the applicant for renewal no longer has a foreign credential, the applicant must present proof from the foreign credentialing body that the applicant for renewal was not the subject of any disciplinary proceedings or investigations at the time that the foreign credential lapsed; and (d) Either show completion of continuing professional education substantially equivalent to that required under rule 0020-05-.03 within the two (2) year period preceding renewal application, or petition the Board for complete or partial waiver of the CPE requirement based on the ratio of foreign practice to practice in this State.

(4) The holder of a CPA certificate issued in reliance on a foreign accounting credential shall report any investigations undertaken, or sanctions imposed, by a foreign credentialing body against the CPA’s foreign credential.

(5) Suspension or revocation of, or refusal to renew, the CPA’s foreign accounting credential by the foreign credentialing body may be evidence of conduct reflecting adversely upon the CPA’s fitness to retain the certificate and may be a basis for Board action.

(6) Conviction of a felony or any crime involving dishonesty or fraud under the laws of a foreign country is evidence of conduct reflecting adversely on the CPA’s fitness to retain the certificate and is a basis for Board action.

(7) The Board shall notify the appropriate foreign credentialing authorities of any sanctions imposed against a CPA.

(8) The Board may participate in joint investigations with foreign credentialing bodies and may rely on evidence supplied by such bodies in disciplinary hearings.

History

Authority: T.C.A. §§ 62-1-105, 62-1-107, 62-1-111(a)(12), and 62-1-111(a)(14).
Administrative History: Original rule filed May 13, 1991; effective June 27, 1991. Repeal filed August 2, 1996; effective October 16, 1996. Original rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-01-.15 REPEALED

History

Authority: T.C.A. §§ 62-1-105, 62-1-111, and 62-1-124.
Administrative History: Original rule filed May 11, 1995; effective July 24, 1995. Repeal filed June 10, 1999; effective August 24, 1999.

Chapter 0020-02 Educational and Experience Requirements

Tenn. Comp. R. & Regs. 0020-02-.01 RECOGNIZED COLLEGES AND UNIVERSITIES

(1) As used in this chapter, a “semester hour” means the conventional college semester hour.

Quarter hours may be converted to semester hours by multiplying them by two-thirds.

Semester hours received from a class for which dual credit is given may only be applied once towards an applicant’s required semester hours.

(2) For purposes of evaluating the education qualifications of applicants for certificates under T.C.A. § 62-1-106, the Board will recognize those junior colleges, colleges and universities accredited at the time the applicant’s degree was received by virtue of membership in one of the following accrediting agencies:

(a) Southern Association of Colleges and Schools Commission on Colleges;

(b) Middle States Commission on Higher Education;

(d) Northwest Commission on Colleges and Universities;

(e) Western Association of Schools and Colleges Senior College and University Commission;

(f) Higher Learning Commission;

(g) Association to Advance Collegiate Schools of Business-International; or (h) Accreditation Council for Business Schools and Programs (3) An applicant whose degree was received from a non-accredited college or university may qualify under the provisions of paragraphs (4), (6) or (7) of this rule.

(4) If an institution was not accredited at the time an applicant’s degree was received but was accredited at the time the applicant’s application was filed with the Board, the institution will be recognized as acceptable to the Board for the purposes of T.C.A. § 62-1-106, provided the institution:

(a) Certifies that the applicant’s total educational program would qualify the applicant for graduation with a baccalaureate degree during the time the institution has been accredited; and (b) Furnishes the Board satisfactory proof, including college catalogue course numbers and descriptions, that the pre-accrediting courses used to qualify the applicant as an accounting major can be matched with substantially equivalent post-accredited courses.

(5) If an applicant’s degree was received at an accredited college or university as defined in paragraphs (2), (3), and (4) of this rule, but the education program used to qualify the applicant included courses taken at either a two-year or non-accredited institution before or after graduation, such courses will be deemed to have been taken at the accredited institution from which the applicant’s baccalaureate degree was received; provided, however, that the courses were either accepted by virtue of inclusion in an official transcript or by certification to the Board.

(6) A graduate of a four-year degree-granting institution which was not accredited at the time the applicant’s degree was received or at the time of filing the application will be recognized by the Board as a graduate of a four-year accredited college or university, provided:

(a) A credential evaluation service approved by the Board certifies that the applicant’s degree is equivalent to a degree from an accredited educational institution; or (b) 1. An accredited educational institution, as defined in paragraphs (2) and (3) of this

rule, accepts the applicant’s non-accredited baccalaureate degree for admission to a degree program;

The applicant satisfactorily completes at least fifteen (15) semester or twenty-two (22) quarter hours in post-baccalaureate education at the accredited educational institution, of which at least nine (9) semester or thirteen (13) quarter hours shall be in accounting; and 3. The accredited college or university certifies that the applicant is in good standing for continuation in the graduate program or has maintained a grade point average in these courses that is necessary for graduation.

(7) Notwithstanding the foregoing provisions of this rule, the Board may recognize, after thorough evaluation, any junior college, college or university holding membership in the Association of Independent Colleges and Schools for purposes of evaluating the educational qualifications of applicants pursuant to Tenn. Code Ann. § 62-1-106. Provided, however, the Board may impose such reasonable limitations as it deems necessary on the scope of recognition to be given any individual institution pursuant to this paragraph.

History

Authority: T.C.A. §§ 58-308, 62-1-105, 62-1-106, and 62-1-111.
Administrative History: Original rule filed May 28, 1987; effective August 27, 1987. Amendment filed August 5, 1991; effective September 19, 1991. Amendment filed February 8, 1993; effective March 25, 1993. Amendment filed April 20, 1994; effective July 4, 1994. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed August 15, 2006; effective October 29, 2006. Amendments filed August 12, 2016; effective November 10, 2016. Amendments filed March 17, 2022; effective June 15, 2022.

Tenn. Comp. R. & Regs. 0020-02-.02 EDUCATION

(1) An applicant will be deemed to have met the educational requirement for the purpose of being eligible to receive a certificate pursuant to T.C.A. § 62-1-106(c)(1) if the applicant has earned a baccalaureate or higher degree from an accredited educational institution and obtained the minimum number of hours required by T.C.A. § 62-1-106(c) which includes:

(a) At least thirty (30) semester or forty-five (45) quarter hours of accounting education including the elementary level. The following subject matter content areas qualify as accounting education:

Principles or introductory accounting 2. Financial accounting and reporting for business organizations 3. Financial statement auditing 4. Taxation 5. Accounting information systems 6. Financial accounting and reporting for government and not-for-profit entities 7. Attestation engagements 8. Managerial or cost accounting 9. Mergers and acquisitions 10. Tax and financial planning 11. Fraud examination 12. Internal controls and risk assessment 13. Financial statement analysis 14. Accounting research analysis 15. Tax research and analysis 16. Data analytics, data interrogation techniques, and/or digital acumen in an accounting context, whether taken in the business school or in another college or university program, such as the engineering, computer science, or math programs 17. Ethics (accounting course)
Other accounting-related content areas included in the Uniform CPA Examination Blueprints or as may be approved by the Board.

(b) For courses that do not qualify as Board-approved subject matter areas as listed above in 0020-02-.02(1)(a) and require further Board review, approval will be granted if the course qualifies toward an accounting degree and provides a foundation in accounting subject matter content. The Board will consider the following factors in determining whether a course will qualify. The course should:

Develop the skills required to apply the knowledge attained (including skills in communications, critical thinking, research and analysis);
Include and emphasize ethical behavior, professional skepticism and judgment, and professional responsibility; and 3. Provide quality instruction in subjects that clearly contribute to the knowledge, skills and abilities necessary to meet the public’s expectations of a CPA.

(c) Not more than nine (9) semester or equivalent quarter hours may be internship programs. Of these nine (9) semester hours or equivalent quarter hours, a maximum of six (6) semester hours or equivalent quarter hours may be applied to the thirty (30) semester or forty-five (45) quarter hours in accounting; and, (d) At least twenty-four (24) semester or thirty-six (36) quarter hours in general business education in one (1) or more of the following:

Algebra, Calculus, Statistics, Probability 2. Business Communication 3. Business Law 4. Economics 5. Ethics (business course)
Finance 7. Management 8. Technology/Information Systems 9. Marketing 10. Data analytics, data interrogation techniques, and/or digital acumen, whether taken in the business school or in another college or university program, such as the engineering, computer science or math programs.
Other business-related content areas included in the Uniform CPA Examination Blueprints or as may be approved by the Board.

(2) For purposes of this rule, accounting hours, other than elementary courses, above the minimum requirement may be substituted for general business education.

(3) For purposes of this rule, candidates must have at least twenty-four (24) semester or thirtysix (36) quarter hours of accounting courses at the upper division level, junior level courses or higher. Lower division level courses, including those completed at junior college, that transfer to a four-year degree-granting institution as upper division level may be counted as upper division level provided the transferred credits are listed on an official transcript from the four-year degree-granting institution.

(4) An applicant for CPA examination shall be deemed to have met the educational requirement solely for the purpose of being admitted to take the CPA examination pursuant to T.C.A. § 62-1-106(c)(2) if the applicant has earned a baccalaureate or higher degree from an accredited educational institution and obtained at least eighteen (18) semester or twentyseven (27) quarter hours of accounting education at the upper division level, junior level courses or higher. Semester or quarter hours from internship programs may not be applied to the eighteen (18) semester or twenty-seven (27) quarter hours in accounting required by this paragraph.

(a) An application to sit for examination may be filed, processed and approved prior to the completion of a baccalaureate or higher degree so long as the applicant submits materials with the application that demonstrate that, at the time of the first examination, the applicant will have a baccalaureate or higher degree with the hours of accounting education required by paragraph (4).

(b) A certificate of enrollment and certified transcript from the educational institution demonstrating that the applicant will have the required degree prior to the first examination shall be sufficient documentation to demonstrate that the applicant will have a baccalaureate or higher degree with the hours of accounting education required by paragraph (4) at the time of the first examination; provided, however, that the Board or its designee may accept such other reasonable documentation as an applicant may provide properly demonstrating that the applicant will have met the requirements of this paragraph prior to examination.

(c) No credit will be given to an applicant for an examination if that applicant fails to successfully obtain a baccalaureate or higher degree with the hours of accounting education required by paragraph (4) prior to the time the applicant took the examination.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-106.
Administrative History: Original rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed August 15, 2006; effective October 29, 2006. Repeal and new rule filed April 6, 2011; effective July 5, 2011. Amendment filed March 26, 2012; effective June 24, 2012. Amendments filed August 12, 2016; effective November 10, 2016. Amendments filed October 28, 2016; effective January 26, 2017. Amendments filed March 17, 2022; effective June 15, 2022. Amendments filed February 28, 2024; effective May 28, 2024.

Tenn. Comp. R. & Regs. 0020-02-.03 EXPERIENCE

(1) The experience required to be demonstrated for issuance of an initial certificate pursuant to Tenn. Code Ann. § 62-1-106(j) shall meet the requirements of this rule.

(a) Experience may consist of providing any type of services or advice using accounting, attest, management advisory, financial advisory, tax or consulting skills.

(b) The applicant shall have his or her experience verified to the Board by a licensee as defined in the Act or a licensee from another state. Acceptable experience shall include employment in industry, government, academia or public practice. In evaluating experience, the Board shall consider such factors as the complexity and diversity of the work.

(c) One (1) year of experience shall consist of full- or part-time employment that extends over a period of no less than one (1) year and no more than three (3) years and includes no fewer than two thousand (2,000) hours of performance of services described in subparagraph (1)(a) above.

(d) In accordance with Tenn. Code Ann. § 62-1-108(c)(2) any individual licensee who is responsible for supervising attest services and signs or authorizes another person to sign the accountant’s report on the financial statements on behalf of the firm, shall meet professional competency requirements and shall have no less than two (2) years of experience satisfactory to the Board in the preparation of financial statements or reports on financial statements.

(e) Experience must be earned within the ten (10) year period immediately preceding the latest application for a certificate under the Act.

(2) Evidence of Applicant’s Experience.

(a) Any licensee who has been requested by an applicant to submit to the Board evidence of the applicant’s experience and has refused to do so shall, upon request by the Board, explain in writing or in person the basis for such refusal.

(b) The Board may require any licensee who has furnished evidence of an applicant’s experience to substantiate the information.

(c) Any applicant may be required to appear before the Board or its representative to supplement or verify evidence of experience.

(d) The Board may inspect documentation relating to an applicant’s claimed experience.

History

Authority: T.C.A. §§ 62-1-105, 62-1-106, 62-1-107, and 62-1-108.
Administrative History: Original rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed August 15, 2006; effective October 29, 2006.

Chapter 0020-03 Rules of Professional Conduct

Tenn. Comp. R. & Regs. 0020-03-.01 DEFINITIONS

(1) For the purpose of this Chapter, unless the context otherwise requires:

(a) “Client” shall be defined as in Tenn. Code Ann. § 62-1-103;

(b) “Enterprise” means any person(s) or entity, whether organized for profit or not, with respect to which a licensee performs professional services;

(c) “Firm” means a sole proprietorship, partnership, or corporation holding a permit or required to hold a permit issued under Tenn. Code Ann. §§ 62-1-108, 62-1-109 or corresponding prior law;

(d) “Licensee” shall be defined as in Tenn. Code Ann. § 62-1-103;

(e) “Professional service” means any service performed or offered by a licensee for a client in the course of the practice of public accountancy.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-03-.02 APPLICABILITY

(1) The provisions of this Chapter shall apply to all professional services performed in the practice of public accountancy or in the provision of accounting services, and shall apply to all licensees except:

(a) Where the wording of a rule indicates otherwise; and (b) That a licensee who is practicing public accountancy outside the United States will not be subject to disciplinary action by the Board for departing from any of the provisions of this chapter as long as the licensee’s conduct is in accord with the standards of professional conduct applicable to the practice of public accountancy in the country in which the licensee is practicing. However, where a licensee’s name is associated with financial statements under circumstances which would entitle the reader to assume that United States practices are followed, the licensee shall comply with rules within this

chapter.

(2) A licensee shall comply with the AICPA Code of Professional Conduct when these rules are silent on any matter.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Amendment filed April 20, 1994; effective July 4, 1994. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2005; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-03-.03 INDEPENDENCE

A licensee in the performance of professional services, including those who are not members of the AICPA, shall conform to the independence standards established by the AICPA, and where applicable, the United States Securities and Exchange Commission, the General Accounting Office and other regulatory or professional standards setting bodies.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed August 15, 2005; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-03-.04 INTEGRITY AND OBJECTIVITY

(1) In the performance of any professional service, a licensee shall maintain objectivity and integrity, shall be free of any undisclosed conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-03-.05 CONTINGENT FEES, COMMISSIONS, AND OTHER CONSIDERATION

(1) As used in this rule unless the context otherwise requires:

(a) “Attest” shall be defined as in Tenn. Code Ann. § 62-1-103.

(b) “Audit” means an examination of financial statements of a person or entity by a certified public accountant or public accountant, conducted in accordance with generally accepted auditing standards, to determine whether, in the opinion of the certified public accountant or public accountant, the statements conform with generally accepted accounting principles or, if applicable, with another comprehensive basis of accounting.

(c) “Commission” means compensation for recommending or referring any product or service to be supplied by another person.

(d) “Compilation of a financial statement” means a presentation of information in the form of a financial statement that is the representation of any other person without the undertaking of the certified public accountant or public accountant to express any assurance on the statement.

(e) “Consideration” means compensation other than a commission, including but not limited to compensation for recommending or referring any service of a certified public accountant or public accountant to any person.

(f) “Contingent fee” means a fee established for the performance of any service pursuant to an arrangement under which a fee will not be charged unless a specified finding or result is attained, or under which the amount of the fee is otherwise dependent upon a finding or result of such service. “Contingent fee” does not mean a fee fixed by a court or other public authority, or a fee related to any tax matter which is based upon the results of a judicial proceeding or the findings of a governmental agency.

(g) “Examination of prospective financial information” means an evaluation by a certified public accountant or public accountant of a forecast or projection, the support underlying the assumptions in the forecast or projection, whether the presentation of the forecast or projection is in conformity with professional presentation guidelines, or whether the assumptions in the forecast or projection provide a reasonable basis for the forecast or projection.

(h) “Person” means any natural person, corporation, partnership, or other entity.

(i) “Review of a financial statement” means to perform inquiries and analytical procedures that permit a certified public accountant or public accountant to determine whether there is a reasonable basis for expressing limited assurance that there are no material modifications that should be made to financial statements in order for them to be in conformity with generally accepted accounting principles or, if applicable, with another comprehensive basis of accounting.

(2) A licensee shall neither pay any consideration or commission to obtain a client nor accept any consideration or commission when the licensee or the licensee’s firm also performs for that client the services listed in T.C.A. § 62-1-122(a)(1) through (a)(3). This prohibition applies during the period in which the licensee is engaged to perform any of the listed services and the period covered by any historical financial statements involved in such listed services.

(3) A licensee who is not prohibited by this rule from performing services or receiving consideration or a commission and who is paid or expects to be paid consideration or a commission shall disclose that fact, in compliance with the requirements of T.C.A. § 62-1-122 and Rule 0020-03-.06, to any person to whom the licensee recommends or refers a product or service to which the commission or consideration relates.

(4) Any licensee who accepts consideration or a commission for a referral shall disclose such acceptance or payment to the client in compliance with the requirements of T.C.A. § 62-1-122 and Rule 0020-03-.06.

(5) A licensee shall not receive or agree to receive a contingent fee from a client for the following:

(a) Performance of any professional services for a client for whom the licensee or person associated with the licensee performs any of the services listed in T.C.A. § 62-1- 123(b)(1)(A) through (C) ; or (b) Preparation of an original tax return.

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

(6) Any licensee who accepts or agrees to accept a contingent fee shall disclose the terms of such contingent fee to the client in compliance with the requirements of Tenn. Code Ann. § 62-1-123 and Rule 0020-03-.06.

(7) Nothing in this rule shall be construed to prohibit:

(a) Payments for the purchase of all, or a part, of an accounting practice;

(b) Retirement payments to persons formerly engaged in the practice of public accountancy or payments to the heirs or estates of such persons; or (c) Payments, including incentive or bonus payments, to employees or members of an accounting firm as compensation for their services.

History

Authority: T.C.A. §§ 62-1-105, 62-1-111, 62-1-122, and 62-1-123.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Amendment filed May 11, 1995; effective July 24, 1995. Amendment filed February 16, 1998; effective May 2, 1998. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-03-.06 DISCLOSURES

(1) A licensee who is not prohibited from performing services or receiving consideration or a commission and who is paid or expects to be paid consideration or a commission shall disclose that fact in compliance with the requirements of this rule to any person to whom the licensee recommends or refers a product or service to which the commission relates.

(2) Any licensee who accepts consideration or a commission for a referral shall disclose such acceptance or payment to the client in compliance with the requirements of this rule.

(3) Any licensee who accepts or agrees to accept a contingent fee shall disclose the terms of such contingent fee to the client in compliance with the requirements of this rule.

(4) The disclosure must:

(a) Be in writing and be clear and conspicuous;

(b) State the amount of the consideration or commission or the basis on which it will be computed; and (c) Be made at or prior to the time of the recommendation or referral of the product or service for which consideration or commission is paid or prior to the client retaining the licensee to whom the client has been referred for which a referral fee is paid; or (d) Be made prior to the time the licensee undertakes representation of or performance of the service upon which a contingent fee will be charged.

(5) The following form may be used to comply with the disclosures required by this rule and Tenn.

Code Ann. §§ 62-1-122 and 62-1-123. A form which contains additional information may be used by a licensee if the form includes the minimum disclosure requirements.

STATEMENT OF DISCLOSURE OF COMMISSIONS, CONTINGENT FEES,

AND OTHER CONSIDERATION

Certified public accountants and public accountants are required by law to disclose to clients the receipt or payment of certain commissions and contingent fees.

The purpose of this disclosure statement is to acknowledge that proper disclosure has been made and that a copy of this statement has been provided to each of the signatories thereof.

I hereby acknowledge that on this___________________ day of ____________________ , 20___ . ________________________________________has disclosed that he/she/the firm will receive/pay a CPA/PA/Firm commission/contingent fee/consideration of ________________________________________________ AMOUNT in relation to goods or services he/she/the firm has agreed to provide or recommend. ______________________________________ ____________________ Client (signature) Date ______________________________________ ____________________ CPA/PA/Firm (signature) Date

History

Authority: T.C.A. §§ 62-1-105, 62-1-111, 62-1-122, and 62-1-123.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Amendment filed February 16, 1998; effective May 2, 1998. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-03-.07 COMPETENCE

(1) A licensee shall comply with the following standards and with any interpretations thereof by bodies designated by the AICPA, or by other entities having similar generally recognized

authority.

(a) Professional Competence. Undertake only those professional services that the licensee or the licensee’s firm can reasonably expect to be completed with professional competence.

(b) Due Professional Care. Exercise due professional care in the performance of professional services.

(d) Sufficient Relevant Data. Obtain sufficient relevant data to afford a reasonable basis for conclusions or recommendations in relation to any professional services performed.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-03-.08 COMPLIANCE WITH STANDARDS

A licensee who performs attest, management advisory, tax, or other professional services shall comply with standards promulgated by the American Institute of Certified Public Accountants or by other entities having similar authority as recognized by the Board.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-03-.09 ;

(b) Affect in any way the licensee’s obligation to comply with a validly issued and enforceable subpoena or summons;

(c) Prohibit review of a licensee’s professional practice by the AICPA, a state CPA society or state PA association, or the Board;

(d) Preclude a licensee from initiating a complaint with or responding to any inquiry made by a recognized investigative or disciplinary body;

(e) Prohibit a licensee from utilizing any such relevant information in the defense of a claim or reasonably anticipated claim against the licensee; or (f) Restrict the exchange of information with a recognized investigative or disciplinary body.

(3) Licensees of a recognized investigative or disciplinary body and professional practice reviewers shall not use to their own advantage or disclose any licensee’s confidential client information that comes to their attention in carrying out their official responsibilities.

History

Authority: T.C.A. §§ 62-1-105, 62-1-111, and 62-1-116.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-03-.10 CONFIDENTIAL CLIENT INFORMATION

(1) A licensee shall not disclose any confidential client information without the specific consent of the client.

(2) This rule shall not be construed to:

(a) Relieve a licensee of his or her professional obligations under Rules 0020-03-.08 and

Tenn. Comp. R. & Regs. 0020-03-.11 RECORDS

(1) A licensee shall, upon request made within a reasonable time, furnish to his or her client or former client:

(a) A copy of any report or other documentation belonging to, or obtained from or on behalf of, the client, which the licensee removed from the client’s custody. The licensee may make and retain copies of such documents when they form the basis for work performed by the licensee;

(b) Any accounting or other documents belonging to, or obtained from or on behalf of, the client, which the licensee removed from the client’s premises or received from the client’s custody. The licensee may make and retain copies of such documents when they form the basis for work performed by the licensee; and (c) A copy of the licensee’s working papers, to the extent that such working papers include records which would ordinarily constitute part of the client’s books and records and are not otherwise available to the client, to include but not be limited to general ledgers, general journals, fixed asset and depreciation records. Provided, however, that nothing in this rule shall require a licensee to furnish any work product to his or her client or others before the client has made satisfactory arrangements for payment for services rendered to or on behalf of such client.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-115.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Repeal filed February 18, 1993; effective April 3, 1993. Original rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-03-.12 DISCREDITABLE ACTS

(1) A licensee shall not commit any act that reflects adversely on the profession.

(2) A licensee or a candidate for licensure who solicits, discloses, and/or uses information obtained through violation of any nondisclosure statement of the Uniform CPA Examination shall be considered to have committed an act discreditable to the profession.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-03-.13 ACTING THROUGH OTHERS

(1) A licensee shall not permit others to carry out on his/her behalf, either with or without compensation, any act which, if carried out by the licensee, would constitute a violation of this

chapter.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-03-.14 ADVERTISING AND OTHER FORMS OF SOLICITATION

(1) A licensee shall not seek to obtain clients by advertising or other forms of solicitation in a manner that is false, misleading or deceptive.

(2) Solicitation by the use of coercion, over-reaching or harassing conduct is prohibited.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-03-.15 FIRMS

(1) A CPA or PA firm name must be registered with and approved by the Board.

(2) The Board shall not approve a CPA or PA firm name that is misleading.

(3) Reasons that a firm name may be considered misleading include, but are not limited to:

(a) Containing any representation that would likely cause a reasonable person to misunderstand or be confused about the form of the legal entity of the firm in regards to ownership or organization, which includes but is not limited to:

Implying the existence of a corporation when the firm is not a corporation, such as through the use of the words “corporation,” “incorporated,” “Ltd,” “professional corporation,” or an abbreviation thereof as part of the firm name if the firm is not incorporated or is not a professional corporation;
Implying the existence of a partnership when there is not a partnership, such as by use of the terms “partnership” or “limited liability partnership” or the abbreviation “LLP” if the firm is not such an entity;
Including the name of an individual who is not a CPA if the title “CPAs” is included in the firm name;
Including information about or indicating an association with persons who are not members of the firm, except as permitted pursuant to T.C.A. § 62-1-113(i); or 5. Including the terms “& Company,” “& Associate(s),” or “Group,” if the firm does not include, in addition to the named partner, shareholder, owner, or member, at least one other unnamed partner, shareholder, owner, member, or staff employee;

(b) Containing any representation that would likely cause a reasonable person to have a false or unjustified expectation of favorable results, or capabilities, through the use of a false or unjustified statement of fact as to any material matter;

(d) Including the name of an owner whose license has been revoked by the Board for disciplinary reasons, whereby the licensee has been prohibited from practicing public accountancy or prohibited from using the title CPA; or (e) The firm name is similar to or the same as an existing CPA firm name within the State of Tennessee.

(4) The following types of CPA firm names are not in and of themselves misleading and are permissible so long as they do not violate any other provisions:

(a) A firm name that includes the names of one or more former or present owners;

(b) A firm name that excludes the names of one or more former or present owners;

(c) 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 such title or are former owners who held such title at the time they ceased to be owners of the firm;

(d) A firm name that includes the name of a non-CPA owner if the “CPA” title is not a part of the firm name; or (e) A firm name that contains an acronym if all of the words that create the acronym meet all of the other requirements of Rule 0020-03.-15.

(5) The Board may approve the use of a firm name if it contains a word or words other than the name or names of current or former partners, including those with a nontraditional spelling of a word, so long as the name:

(a) Does not harm or mislead the public;

(b) Does not compromise the health, safety, or welfare of the public; and (c) Does not conflict with any of the other requirements of Rule 0020-03-.15.

(6) A Network Firm as defined in the AICPA Code of Professional Conduct (Code) in effect July 1, 2011, may use a common brand name, or share common initials, as part of the firm name.

(7) A Network Firm as defined in the AICPA Code of Professional Conduct (Code) in effect July 1, 2011, may use the Network name as the firm’s name, provided it also shares one or more of the following with other firms in the Network:

(a) Common control, as defined by generally accepted accounting principles in the United States, among the firms through ownership, management, or other means;

(b) Profits or cost, excluding costs of operating the association, cost of developing audit methodologies, manuals and training courses, and other costs that are immaterial to the firm;

(c) Common business strategy that involves ongoing collaboration amongst the firms whereby the firms are responsible for implementing the association’s strategy and are held accountable for performance pursuant to that strategy;

(d) Significant professional resources; or (e) Common quality control policies and procedures that participating firms are required to implement and that are monitored by the association.

(8) A partner or shareholder surviving the death or withdrawal of all other partners or shareholders may continue to practice under the partnership or professional association name for up to two (2) years after becoming a sole practitioner, unless the partner or shareholder is subject to Rule 0020-03-.15(3)(d).

(9) When a firm name violation is determined to exist, the firm shall have sixty (60) calendar days after receiving notification by the Board to come into compliance with all applicable rules and statutes.

History

Authority: T.C.A. §§ 62-1-105, 62-1-108, 62-1-111, and 62-1-113.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006. Amendments filed July 5, 2018; effective October 3, 2018.

Tenn. Comp. R. & Regs. 0020-03-.16 NOTIFICATION TO THE BOARD

(1) A licensee shall notify the Board in writing within thirty (30) days of any change of name, mailing address, e-mail address, and, in the case of individual licensees, change of employment.

(2) Except as otherwise provided, a licensee shall respond in writing to any communication from the Board requesting a response within thirty (30) days of the mailing of such communication by registered or certified mail to the last address furnished to the Board by the licensee.

(3) Upon the receipt of a complaint against a licensee, the Board may transmit a copy of such complaint to the licensee. Such licensee shall, within fourteen (14) days of receipt, file a written answer to the complaint with the Board, unless otherwise granted an extension of time.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-111.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed August 7, 1985; effective September 6, 1985. Amendment filed February 18, 1993; effective April 3, 1993. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006. Amendment filed March 26, 2012; effective June 24, 2012.

Tenn. Comp. R. & Regs. 0020-03-.17 RETENTION OF RECORDS

A licensee shall maintain copies, or other obtainable facsimile records, or computer records, in whatever manner kept, of all work papers and work product used to render or support rendering accounting services to a client for a period of five (5) years. The five (5) year period shall commence at the end of the fiscal period in which the engagement was conducted. Premature destruction of these records shall subject the licensee to disciplinary action.

History

Authority: T.C.A. §§ 62-1-105(e)(4) and 62-1-111.
Administrative History: Original rule filed October 15, 2003; effective December 29, 2003. Amendments filed August 12, 2016; effective November 10, 2016.

Chapter 0020-04 Disciplinary Action and Civil Penalties

Tenn. Comp. R. & Regs. 0020-04-.01 DEFINITIONS

(1) For the purpose of this chapter, unless the context otherwise requires “licensee” shall be defined as in Tenn. Code Ann. § 62-1-103.

History

Authority: T.C.A. §§ 62-1-105, 62-1-111(a)(2), and 62-1-117.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-04-.02 CIVIL PENALTIES

(1) The Tennessee State Board of Accountancy may, in addition to or in lieu of any other lawful disciplinary action, assess civil penalties for each separate violation of statutes, rules or orders enforceable by the Board in accordance with the following schedule:

Violation Penalty Tenn. Code Ann. § 62-1-111(a)(1) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(2) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(3) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(4) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(5) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(6) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(7) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(8) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(9) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(10) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(11) $0-$1000 Tenn. Code Ann. § 62-1-111(a)(12) $0-$1000 (2) Each day of continued violation may constitute a separate violation.

(3) In assessing civil penalties, the following factors may be considered.

(a) Whether the amount imposed will be a substantial economic deterrent to the violator.

(b) The circumstances leading to the violation.

(d) The economic benefits gained by the violator as a result of non-compliance.

(e) The interest of the public.

History

Authority: T.C.A. §§ 56-1-308, 62-1-105, 62-1-111, and 62-1-117.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-04-.03 GROUNDS FOR DISCIPLINE AGAINST LICENSEES

(1) The grounds for disciplinary action against licensees, are set out in Tenn. Code Ann. § 62-1- 111 in both specific and general terms. The general terms of that provision include but are not limited to the following particular grounds for such disciplinary action.

(a) Fraud or deceit in obtaining a certificate, registration or permit includes the submission to the Board of any knowingly false or forged evidence in, or in support of, an application for a certificate, registration or permit, and cheating on an examination as defined in these rules.

(b) Dishonesty, fraud or gross negligence include knowingly, or through gross negligence, making misleading, deceptive or untrue representations in the performance of services.

Using the CPA or PA title or providing attest services in this State without a certificate, registration or permit to practice or without properly qualifying to practice across state lines under the substantial equivalency provision of the Act;
Using or attempting to use a certificate, registration or permit which has been surrendered, suspended or revoked;
Making any false or misleading statement, in support of an application for a certificate, registration or a permit filed by another;
Failure of a licensee to provide any explanation requested by the Board regarding evidence submitted by the licensee in support of an application filed by another, or regarding a failure or refusal to submit such evidence;
Failure by a licensee to furnish for inspection upon request by the Board or its representative documentation relating to any evidence submitted by the licensee in support of such an application;
Failure to satisfy the continuing professional education requirements set out in the Act and/or failure to comply with the continuing education requirements of these rules;
Failure to comply with professional standards as to the attest experience requirement for those who supervise attest engagements and/or sign reports on financial statements; or 8. Failure to comply with the peer review requirements set out in the Act and these rules.
Failure to timely pay professional privilege tax as required by law.

(2) Conduct reflecting adversely upon the licensee's fitness to perform services includes but is not limited to:

(a) Adjudication as mentally incompetent;

(b) Fiscal dishonesty of any kind;

(d) Concealment of information regarding violations by other licensees of the Act or the Rules thereunder when questioned or requested by the Board; and (e) Willfully failing to file a report or record required by state or federal law; willfully impeding or obstructing the filing of such a report or record, or inducing another person to impede or obstruct such filing by another; and the making or filing of such a report or record which one knows to be false.

(3) The Board has no jurisdiction over fee disputes between a licensee and a client. The Board shall not seek to impose discipline against a licensee solely on the basis of a dispute between the licensee and the client regarding payment of fees by the client for professional services rendered by the licensee.

History

Authority: T.C.A. §§ 4-3-1304, 62-1-105, 62-1-107, 62-1-111, 62-1-113, 62-1-117, and 67-4-1704.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed October 29, 1981; effective January 27, 1982. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed April 20, 1994; effective July 4, 1994. Amendment filed May 11, 1995; effective July 24, 1995. Amendment filed August 2, 1996; effective October 16, 1996. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006. Amendment filed December 11, 2013; effective March 11, 2014. Amendment filed February 11, 2015; effective May 12, 2015.

Tenn. Comp. R. & Regs. 0020-04-.04 REPEALED

History

Authority: T.C.A. §§ 62-1-105, 62-1-111(a)(2), 62-1-107(b), and 62-1-117.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed December 1, 1987; effective January 15, 1988. Amendment filed August 5, 1991; effective September 19, 1991. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Repeal filed August 12, 2016; effective November 10, 2016.

Tenn. Comp. R. & Regs. 0020-04-.05 REVIEW OF PROFESSIONAL WORK PRODUCT

(1) The Board may solicit and receive publicly available reports of licensees and individuals practicing in this state pursuant to Tenn. Code Ann. § 62-1-117, and the related financial statements from clients, public agencies, banks, and other users of financial statements on a general and random basis without regard to whether an application for renewal of the particular licensee’s license is then pending or whether there is any formal complaint or suspicion of impropriety on the part of any particular licensee. The Board may review such reports and otherwise proceed with respect to the results of any such review.

History

Authority: T.C.A. §§ 62-1-105, 62-1-111(a)(2), 62-1-116, and 62-1-117.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed May 13, 1991; effective June 27, 1991. Amendment filed May 11, 1995; effective July 24, 1995. Amendment filed August 2, 1996; effective October 16, 1996. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Tenn. Comp. R. & Regs. 0020-04-.06 SAFE HARBOR LANGUAGE

(1) Non-licensees shall use the following or similar disclaimer language in connection with financial statements to not be in violation of the Act:

(a) “I (we) have prepared the accompanying (financial statements) of (name of entity) as of (time period) for the (period) then ended. This presentation is limited to preparing in the form of financial statements information that is the representation of management (owners).”

(b) “I (we) have not audited, reviewed or compiled, under professional standards prescribed for such services, the accompanying financial statements and accordingly do not express an opinion or any other form of assurance on them. I (we) am (are) not licensed by this state, as a certified public accountant, public accountant or accounting firm, to provide those types of services.”

(2) The use of standard language in any report as defined by Tenn. Code Ann. § 62-1-103, by any non-licensed individual or non-permitted accounting firm, even if the verbiage is slightly altered, will be considered to be a violation of Tenn. Code Ann. §62-1-113(h)(1).

History

Authority: T.C.A. §§ 62-1-105, 62-1-108(c), 62-1-109(c), 62-1-111(a)(9), 62-1-111(2), 62-1-113(h)(1), and 62-1-117.
Administrative History: Original rule filed June 9, 1981; effective August 18, 1981. Amendment filed June 30, 1988; effective August 14, 1988. Repeal and new rule filed June 10, 1999; effective August 24, 1999.

Chapter 0020-05 Continuing Education

Tenn. Comp. R. & Regs. 0020-05-.01 DEFINITIONS

(1) For the purpose of this Chapter, unless the context otherwise requires:

(a) Continuing professional education (CPE) hours and CPE credits shall be considered synonymous;

(b) “License holder” means a certified public accountant or public accountant who holds a license as defined in Rule 0020-01-.01(1)(j).

(c) “Technical fields of study” shall be considered technical subjects that contribute to the maintenance and/or improvement of the competence of a CPA in the profession of accountancy and that directly relate to the CPA’s field of business. These fields of study include, but are not limited to:

Accounting;
Accounting (Government);
Auditing;
Auditing (Government);
Business Law;
Economics;
Finance;
Information Technology;
Management Services;
Regulatory Ethics;
Specialized Knowledge;
Statistics; and 13. Taxes.

(d) “Non-technical fields of study” shall be considered subjects that contribute to the maintenance and/or improvement of the competence of a CPA in areas that indirectly relate to the CPA’s field of business. These fields of study include, but are not limited to:

Behavioral Ethics;
Business Management & Organization;
Communications and Marketing;
Computer Software & Applications;
Personal Development;
Personnel/Human Resources; and 7. Production.

(e) “Blended learning program” means an educational program incorporating multiple learning formats.

(f) “Group program” means any live or internet-based group program.

(g) “Independent study” means an educational process designed to permit a participant to learn a given subject under a learning contract with a CPE program sponsor.

(h) “Nano-learning program” means a tutorial program designed to permit a participant to learn a given subject in a ten-minute timeframe through the use of electronic media and without interaction with a real-time instructor. A nano-learning program is typically focused on a single learning objective and is not paper-based.

(i) “Self-study program” means an educational program completed individually without the assistance or interaction of a real-time instructor.

History

Authority: T.C.A. §§ 62-1-105(e)(3), 62-1-107, 62-1-108(a)(1)(C)(i), 62-1-109(c), and 62-1-111 and Chapter No. 443 of the Public Acts of 1989, Section 15.
Administrative History: Original rule filed September 8, 1981; effective October 23, 1981. Amendment filed June 30, 1988; effective August 14, 1988. Amendment filed August 5, 1991; effective September 19, 1991. Amendment filed November 15, 1991; effective December 30, 1991. Amendment filed April 20, 1994; effective July 4, 1994. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendments filed June 6, 2019; effective September 4, 2019.

Tenn. Comp. R. & Regs. 0020-05-.02 PURPOSE

(1) The Tennessee Accountancy Act of 1998 mandates compliance with continuing education requirements as a prerequisite for renewal of licenses issued by the Board. The purposes of this chapter are to prescribe the basic continuing education requirements for present and future license holders; to establish standards by which continuing education programs will be evaluated for awarding of credit; and to assure compliance with the Act by requiring periodic reporting of educational achievements.

History

Authority: T.C.A. §§ 62-1-105, 62-1-107, 62-1-108, 62-1-109, and 62-1-111.
Administrative History: Original rule filed September 8, 1981; effective October 23, 1981. Amendment filed June 30, 1988; effective August 14, 1988. Amendment filed August 5, 1991; effective September 19, 1991. Amendment filed May 11, 1995; effective July 24, 1995. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-05-.03 .

(9) To receive credit, any program of continuing education not specifically covered by this rule must be approved by the Board before completion of the course. A licensee, once per reporting period, may submit for approval up to sixteen (16) hours of CPE from courses that are sponsored by organizations that are not registered with NASBA, and are either offered on a limited basis or industry specific. A licensee will not receive credit for attending/completing a program that was not timely approved by the Board in accordance with Rule 0020-05- .04(9).

(10) The Board specifically reserves the right to approve or disapprove credit for all continuing education claimed under this rule.

(11) Acceptable evidence for completion of qualifying learning activities shall include the following:

(a) For program or courses as set forth in Rule 0020-05-.04(2)(a) and (b), acceptable evidence should include a certificate of completion or transcript issued by the qualifying CPE program sponsor.

(b) For programs or courses set forth in Rule 0020-05-.04(2)(d) and (e), acceptable evidence should include a certificate of attendance supplied by the program sponsor.

(c) For activities set forth in Rule 0020-05-.04(2)(c), acceptable evidence should include a certificate of completion supplied by the program sponsor or a written certificate of the licensee setting forth all of the following:

The nature of the activity, including items discussed and the materials considered;
The dates on which the learning activity occurred; and 3. The number of CPE credits attributed to the learning activity.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-107.
Administrative History: Original rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed August 15, 2006; effective October 29, 2006. Amendment filed March 26, 2012; effective June 24, 2012. Amendments filed October 28, 2016; effective January 26, 2017. Amendments filed February 23, 2018; effective May 24, 2018. Amendments filed June 6, 2019; effective September 4, 2019.

Tenn. Comp. R. & Regs. 0020-05-.04 QUALIFYING PROGRAMS

(1) In order to qualify for credit toward satisfaction of the requirements of Rule 0020-05-.03, a continuing education program must be a learning opportunity that contributes to the licensee’s knowledge, ability, and/or competence to perform his or her professional responsibilities.

(2) The following learning activities shall qualify for CPE credit:

(a) A learning activity that complies with the Statements on Standards for Continuing Professional Education Programs jointly approved by the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA), and is coordinated and presented by a qualifying CPE program sponsor as set forth in Rule 0020-05-.05. The sources of qualifying learning activities include, but are not limited to, the following:

Group Programs;
Self-Study Programs;
Blended Learning Programs;
Nano-Learning Programs;
Instructor/Developer of CPE programs in 1. through 4. above or in (b) or (d) below;
Technical Reviewer of CPE programs in 1. through 4. above or in (b) or (d) below; and 7. Independent Study.

(b) A college or university course that is coordinated and presented by a qualifying university or college as set forth in Rule 0020-05-.05(3)(b) in a technical or nontechnical field of study;

(c) Participation and work on a technical committee of an international, national, or state professional association, council or member organization, or a governmental entity that supports professional services or industries that require unique and specific knowledge in technical fields of study;

(d) A group learning activity that is coordinated and presented as an organized in-firm or in-house (includes any company that gives training for their employees and others) educational program for employees and others without charge; and (e) Programs of other organizations (accounting, industrial, professional, etc.) recognized by the Board.

(3) Programs requiring attendance may be considered for credit if:

(a) An outline is prepared and preserved;

(b) The program is at least one (1) credit hour [one (1) credit hour = fifty (50) minute period];

(c) The program is conducted by a qualified instructor, discussion leader, or lecturer; and (d) A record of registration or attendance is maintained.

(4) Formal correspondence or other self-study programs, including those administered via computer which require registration and provide evidence of satisfactory completion, may qualify for continuing education credit. Such programs, excluding those offered by the AICPA and state CPA societies, must be approved by the Board or its designee, NASBA’s National Registry of CPE Sponsors.

(5) Continuing education credit will be allowed for service as an instructor/developer, discussion leader, or speaker, at any program for which participants are eligible to receive continuing education credit. Credit for such service will be awarded on the first presentation only, unless a program has been substantially revised. An instructor/developer may receive CPE credit for actual preparation time up to two (2) times the number of CPE credits to which participants would be entitled, in addition to the time for presentation; however, credit hours awarded under this paragraph shall not exceed fifty percent (50%) of the total number of credit hours required by this chapter within any two (2) year period. A licensee who receives credit for services as an instructor/developer, discussion leader, or speaker of a CPE course cannot also receive credit for attendance at the same or substantially same course that the licensee served as an instructor/developer, discussion leader, or speaker within the preceding twelve month period.

(6) In the board’s discretion, continuing education credit may be allowed for writing articles and books, provided that their preparation contributes to the professional competence of the license holder. Credit for such preparation may be awarded on a self-declaration basis of up to fifty percent (50%) of the two (2) year continuing education requirement. Acceptable evidence may include a copy of the publication that names the licensee as author or contributor; a statement from the licensee supporting the number of CPE credits claimed; and the name and contact information of the independent reviewer(s) or publisher. Additional credit may be awarded in exceptional circumstances, upon the written request of the license holder, accompanied by a copy of the article(s) or books(s) and a statement of justification.

No credit shall be given for unpublished book(s) or article(s).

(7) Continuing education credit may be allowed for the reading of professional journals and the taking of an examination related thereto. Credit hours obtained under this paragraph are limited to twenty percent (20%) of the total number of credit hours required by this chapter within any two (2)-year period and may not be used to meet the requirements of subparagraphs (1)(a), (b) and (c) of Rule 0020-05-.03.

(8) CPE credit may be allowed for the successful completion of exams for Certified Management Accountant (CMA), Certified Information Systems Auditor (CISA), as well as other similar exams approved by the Board. Credit will be awarded at a rate of five (5) times the length of each exam taken and limited to fifty percent (50%) of the total CPE required under Rule

Tenn. Comp. R. & Regs. 0020-05-.05 SPONSORS

(1) Prior to offering continuing education program(s), a sponsor who is not exempt under this rule must register as follows:

(a) Those sponsors offering program(s) which total more than sixteen (16) hours per year or offering program(s) more than five (5) times per year must register with the NASBA National Registry of CPE Sponsors.

(b) Those sponsors offering program(s) which total sixteen (16) hours or less per year or offering program(s) five (5) times or less per year must:

Register with the NASBA National Registry of CPE Sponsors, or 2. Register with the NASBA Tennessee Roster of CPE Sponsors.

(2) The sponsor of each continuing education program registered with the NASBA National Registry or Tennessee Roster of CPE Sponsors shall comply with all requirements set forth by NASBA in order to maintain such registration.

(3) The following are exempt from registering with either the NASBA National Registry or Tennessee Roster of CPE Sponsors:

(a) Professional accounting organizations [e.g. AICPA, Tennessee Society of Certified Public Accountants (TSCPA), Tennessee Association of Accountants (TAA), Institute of Management Accountants (IMA), or other similar organizations approved by the Board];

(b) Universities or colleges recognized under Rule 0020-02-.01;

(c) Firms or other entities offering organized in-firm or in-house educational programs for their employees and clients without charge;

(d) Governmental entities.

(4) The sponsor of any continuing education program approved or exempted from registration by the Board must advise attendees of such approval or exemption, and issue to attendees certificates of completion that include:

(a) Sponsor name;

(b) Date(s) of training;

(d) CPE subject code;

(e) CPE credit awarded.

(5) Those entities or organizations exempt from registration under paragraph (3) of this rule shall keep detailed records of the following for a period of five (5) years after the date of the presentation of the program:

(a) The date and location of the program presentation;

(b) The name of each instructor or discussion leader;

(d) A written outline of the program presentation; and (e) The number of continuing education hours allowable.

(6) Approval of any continuing education program may be withdrawn by the Board if the sponsor of such program fails to comply with these provisions.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-107.
Administrative History: Original rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-05-.06 CONTROL AND REPORTING SYSTEM

(1) Each license holder shall biennially, when making application for license renewal, submit on the prescribed form a signed statement setting forth the number of continuing education hours which he or she has completed during the reporting period. Such license holder shall retain documentation supporting such statement for at least five (5) years subsequent to the date of submission.

(2) The Board will verify information submitted by license holders under this rule on a random

basis.

(3) If any continuing education hours claimed in a statement submitted by a license holder pursuant to paragraph (1) of this rule are disapproved, the Board shall notify such license holder of the reason for disapproval. The Board may allow a specified period of time, up to six (6) months, for correction of the deficiencies noted.

(4) Each approved CPE course, program, or activity shall be measured by program length, with one fifty (50) minute period equal to one (1) CPE credit. Computation of CPE credits for qualifying CPE programs shall be as follows:

(a) For group programs, independent study, and blended learning programs, a minimum of one credit must be earned initially, but after the first credit has been earned, credits may be earned in one-fifth (1/5) or one-half (1/2) increments.

(b) For self-study, a minimum of one-half (1/2) credit must be earned initially, but after the first credit has been earned, credits may be earned in one-fifth (1/5) or one-half (1/2) increments.

(d) For blended learning programs, CPE credit must equal the sum of the CPE credit determination for the various completed components of the program.

(e) A technical reviewer of qualifying CPE programs included in Rule 0020-05-.04(a)(5) may receive CPE credit for actual review time up to the actual number of CPE credits for the learning activity. For repeat technical reviews, CPE credit can be claimed only if it can be demonstrated that the learning activity content was substantially changed and such change required significant additional study or research. Not more than fifty percent (50%) of the total CPE credits required for the CPE reporting period can be claimed for technical reviewer CPE credit.

(f) For courses that are part of the curriculum of a university, college, or other educational institution as permitted in Rule 0020-05-.04(2)(b):

Each semester hour credit shall equal fifteen (15) CPE credits, and each quarter hour shall equal ten (10) CPE credits; and 2. For non-credit courses, CPE credit shall equal actual time in class.

History

Authority: T.C.A. §§ 62-1-105(e)(3) and 62-1-107.
Administrative History: Original rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003.

Tenn. Comp. R. & Regs. 0020-05-.07 EXTENSION OF TIME

(1) The Board may, upon written request, extend the time up to six (6) months within which license holders must comply with the requirements of this chapter for reasons of poor health, military service, foreign residence or other good cause.

(2) Any license holder who requests or is granted an extension of time under this rule shall remain subject to rule 0020-05-.06, and shall note such extension on any report required thereunder.

(3) Requests for extension under this rule will be automatically denied if filed later than the December 31 biennial renewal deadline required by these rules.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-107.
Administrative History: Original rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed August 15, 2006; effective October 29, 2006. Amendments filed June 6, 2019; effective September 4, 2019.

Tenn. Comp. R. & Regs. 0020-05-.08 FAILURE TO MEET CPE REQUIREMENTS

(1) A penalty of (8) additional CPE hours will be assessed against those license holders who fail to timely complete the eighty (80) hour two (2) year minimum required by Rule 0020-05-.03, unless an extension of time under Rule 0020-05-.07 is granted by the Board.

(2) A penalty of eight (8) additional CPE hours will be assessed against those license holders who fail to timely complete the forty (40) hour requirement in technical fields of study required by Rule 0020-05-.03, unless an extension of time under Rule 0020-05-.07 is granted by the Board.

(3) A penalty of (8) CPE hours will be assessed against those license holders who fail to timely complete at least twenty (20) hours in each year of the biennial renewal period as required by

Rule 0020-05-.03, unless an extension of time under Rule 0020-05-.07 is granted by the Board.

(4) A penalty of (8) additional CPE hours will be assessed against those license holders who perform the attest function who fail to timely complete the twenty (20) hour requirement in the subject areas of attest and accounting theory and practice required by Rule 0020-05-.03, unless an extension of time under Rule 0020-05-.07 is granted by the Board.

(5) A penalty of eight (8) additional CPE hours will be assessed against those license holders who fail to timely complete the two (2) hour state specific continuing professional education ethics course required by Rule 0020-05-.03, unless an extension of time under Rule 0020-05- .07 is granted by the Board.

(6) A licensee who is assessed a penalty under this rule shall complete such penalty and shall submit proof of completion of such penalty to the Board no later than one hundred and eighty (180) days from the date the Board notifies the licensee of the deficiency.

History

Authority: T.C.A. §§ 62-1-105, 62-1-107, and 62-1-111.
Administrative History: Original rule filed June 10, 1999; effective August 24, 1999. Repeal and new rule filed February 11, 2015; effective May 12, 2015. Amendments filed June 6, 2019; effective September 4, 2019.

Chapter 0020-06 Peer Review Program

Tenn. Comp. R. & Regs. 0020-06-.01 DEFINITIONS

(1) For purposes of this Chapter, unless the context otherwise requires:

(a) “Administering Entity” means an entity approved by a Board-approved sponsoring organization to administer the Board-approved peer review program.

(b) “Approved Peer Review Program” means any peer review program conducted by the Board, the Tennessee Society of Certified Public Accountants, or the AICPA or any other similar program conducted by another individual or entity approved by the Board;

(d) “Firm Location” means an individual office location of a firm;

(e) “Licensee” means certified public accountant or public accountant;

(f) “Peer Review” shall be defined as in T.C.A. § 62-1-103.

(g) “Peer Review Oversight Committee” (“the Committee”) means a Board-appointed committee for monitoring the Board-approved peer review program, including sponsoring organizations’ Administering Entities, to provide reasonable assurance that Administering Entities and respective Peer Review Committee and Report Acceptance Bodies are functioning in a manner that effectively enforces the performance and reporting of peer review in accordance with peer review standards.

(h) “Sponsoring Organization” means a Board-approved professional association, society, or other organization responsible for the facilitation and administration of peer reviews directly or through its Administering Entities and responsible for the oversight of the Administering Entities pursuant to the sponsoring organization’s peer review standards.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-201.
Administrative History: Original rule filed August 2, 1996; effective October 16, 1996. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 15, 2003; effective December 29, 2003. Amendment filed October 17, 2003; effective December 31, 2003. Amendments filed June 30, 2025; effective September 28, 2025.

Tenn. Comp. R. & Regs. 0020-06-.02 PURPOSE

The purpose of the Peer Review Program (Program) is to improve the quality of financial reporting and to assure that the public can rely on the fairness of presentation of financial information on which licensees issue reports. Appropriate educational programs or rehabilitation procedures will ordinarily be recommended or required where professional services do not comply with applicable professional standards; however, when a licensee is unwilling or unable to comply with such standards, or a licensee’s professional services are so egregious as to warrant disciplinary action, such action may be taken as the appropriate means of protecting the public interest.

History

Authority: T.C.A. §§ 62-1-105, 62-1-111, and 62-1-201.
Administrative History: Original rule filed August 2, 1996; effective October 16, 1996. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006.

Tenn. Comp. R. & Regs. 0020-06-.03 PEER REVIEW OVERSIGHT COMMITTEE

(1) The Board may appoint a Committee to assist it in the implementation of the Program and or to monitor other Board-approved peer review programs.

(2) Each Committee member shall:

(a) Be an actively licensed CPA in good standing;

(b) Possess accounting, attest and peer review experience deemed sufficient by the Board;

(d) Not be a member of the Board, or have a conflict of interest under applicable law; and (e) Sign a confidentiality agreement indicating they will not divulge any information to the Board that would identify any firm, licensee, peer reviewer, or reviewing firm, as a result of their monitoring of the peer review process.

(3) The responsibilities of the Committee shall include the following:

(a) Monitoring approved peer review programs and reporting periodically to the Board on whether these programs meet the requirements of these rules and Tenn. Code Ann. §§ 62-1-201 et seq.

(b) Considering such other matters and performing such other duties regarding the Program as may be necessary from time to time.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-201.
Administrative History: Original rule filed August 2, 1996; effective October 16, 1996. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed August 15, 2006; effective October 29, 2006. Amendments filed June 30, 2025; effective September 28, 2025.

Tenn. Comp. R. & Regs. 0020-06-.04 BASIC REQUIREMENTS

(1) Enrollment in an approved peer review program is a condition for renewal of a permit for firms that issue attest work as defined in T.C.A. § 62-1-103(1). Each firm location required to hold a permit to practice under T.C.A. § 62-1-108, which performs attest services, shall be covered by a peer review at least once every three (3) years with a report of that review to be submitted to the Board pursuant to Rule 0020-06-.07.

(2) Firms with multiple locations may submit a single peer review report covering all locations.

(3) Firm locations not providing attest services shall not be required to enroll in an approved peer review program until the issuance of the first report provided to the client. A firm shall enroll in an approved peer review program within thirty (30) days of the issuance of the first report provided to a client.

(4) A firm is not required to enroll in an approved peer review program if its only level of service is performing preparation of financial statements (with or without disclaimer reports) under Statements on Standards for Accounting and Review Services (“SSARS”).

(5) Firms required to be registered with and subject to inspection by the Public Company Accounting Oversight Board (“PCAOB”) will also be required to have a peer review under an approved peer review program that covers the portion of the firms’ practice not subject to the PCAOB permanent inspection.

(6) A firm shall schedule, undergo, and complete its initial and subsequent peer reviews in compliance with the sponsoring organization’s peer review standards and related guidance.

A firm’s initial peer review is due eighteen (18) months from the date it enrolled or should have enrolled in the peer review program, with subsequent peer reviews being due every three (3) years thereafter, unless an extension has been granted by the administering entity.

(7) For good cause shown, the Board may grant or renew permits for a reasonable period pending completion of the firm’s peer review.

(8) A firm or individual that does not have offices in Tennessee and that has provided attest services as defined by T.C.A. § 62-1-103(1) to Tennessee clients shall participate in an approved peer review program.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-201.
Administrative History: Original rule filed August 2, 1996; effective October 16, 1996. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 17, 2003; effective December 31, 2003. Amendment filed August 15, 2006; effective October 29, 2006. Amendment filed March 26, 2012; effective June 24, 2012. Amendments filed June 30, 2025; effective September 28, 2025.

Tenn. Comp. R. & Regs. 0020-06-.05 SPONSORING ORGANIZATIONS, PROGRAMS, AND STANDARDS

(1) The Board shall approve peer review sponsoring organizations, programs, and standards.

(2) The Board recognizes the AICPA as an approved sponsoring organization, along with its peer review program. This approval also applies to all Administering Entities approved by the AICPA to administer the peer review program. As a condition of this approval, a sponsoring organization is required to:

(a) Administer peer reviews for nonmember licensees, provided that such nonmembers comply with the applicable peer review standards, and (b) Provide advance notice to the Board if any Administering Entity is to be discontinued.

(3) The Board may approve other peer review sponsoring organizations that are substantially similar to AICPA. To be considered for approval, a sponsoring organization must submit evidence to the satisfaction of the Board. The evidence shall include the standards, procedures, guidelines, oversight process, training materials, and any other related documents used to administer, perform, and accept peer reviews. The Board may request additional documents, as needed to determine whether to grant approval.

(4) The Board may terminate its approval of a sponsoring organization for cause following notice and opportunity to appear before the Board. For purposes of this paragraph, cause includes but is not limited to a substantive change in the Peer Review Program that adversely affects licensees or firms, impairs the Board’s ability to protect the public in this state, or for failure to maintain an ongoing compliance with the requirements of this Chapter.

History

Authority: T.C.A. §§ 62-1-105 and 62-1-201.
Administrative History: Original rule filed August 2, 1996; effective October 16, 1996. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Amendment filed October 17, 2003; effective December 31, 2003. Amendments filed June 30, 2025; effective September 28, 2025.

Tenn. Comp. R. & Regs. 0020-06-.06 REPEALED

History

Authority: T.C.A. §§ 62-1-105(e)(6), 62-1-111(a)(12) and (14), and 62-1-201.
Administrative History: Original rule filed August 2, 1996; effective October 16, 1996. Repeal and new rule filed June 10, 1999; effective August 24, 1999. Repeal filed June 30, 2025; effective September 28, 2025.

Tenn. Comp. R. & Regs. 0020-06-.07 PEER REVIEW SUBMISSION

(1) The objective of this reporting rule is to reinforce the Board’s efforts to ensure that only appropriately qualified firms and licensed CPAs are engaged in offering and rendering attest work. Based upon its review of any documents submitted pursuant to this rule, the Board may consider imposing discipline against a reviewed firm and any individual licensees employed or contracted by the reviewed firm and involved in the attest function if the Board determines a violation occurred.

(2) Each firm shall submit a copy of the results of its most recently accepted peer review to the Board within thirty (30) days from the date of acceptance or completion letter, whichever is applicable. The required documents include:

(a) Peer Review Report which has been accepted by the administering entity;

(b) Firm’s letter of response accepted by the administering entity, if applicable;

(d) Letter(s) accepting the documents signed by the firm with the understanding that the firm agrees to take actions required by the administering entity, if applicable; and (e) Letter signed by the administering entity notifying the firm that required actions have been appropriately completed, if applicable.

(3) For peer reviews scheduled on or after June 1, 2025, the firm is required, within thirty (30) days of the firm sending or receiving such communication, as appropriate, to provide the Board with a copy of any written, including electronic, communication along with any objective information as is applicable:

(a) From the administering entity notifying the firm of the firm’s enrollment or reenrollment in an approved peer review program;

(b) From the firm as part of an approved peer review program that it has not performed engagements subject to peer review in the last twelve (12) months;

(c) Setting a due date for the firm’s current peer review or setting a due date for any open corrective action(s) as part of a peer review;

(d) Granting of peer review, or corrective action, due date extension request, including any communication setting a new date for the peer review or corrective action;

(e) From the administering entity acknowledging the peer review was scheduled; and (f) Providing actual or estimated dates of the peer review commencement or presentation to a report acceptance body.

(4) A peer review shall not be considered complete until the acceptance letter or completion letter (if applicable) is issued by the administering entity with the new due date.

(5) Firms shall authorize the administering entity to provide the Board access to the documents and objective information, referenced in paragraphs (2) and (3) of this rule, via a secure website process such as the AICPA Facilitated State Board Access (“FSBA”).

History

Authority: T.C.A. §§ 62-1-105, 62-1-111, and 62-1-201.
Administrative History: Original rule filed February 23, 2018; effective May 24, 2018. Amendments filed June 30, 2025; effective September 28, 2025.

Tenn. Comp. R. & Regs. 0020 — Accountancy

Chapter 0020-01 Licensing and Registration Requirements

Tenn. Comp. R. & Regs. 0020-01-.01 DEFINITIONS

Tenn. Comp. R. & Regs. 0020-01-.02 BOARD MEETINGS

Tenn. Comp. R. & Regs. 0020-01-.03 BOARD OFFICERS

Tenn. Comp. R. & Regs. 0020-01-.04 FEES

Tenn. Comp. R. & Regs. 0020-01-.05 APPLICATIONS

Tenn. Comp. R. & Regs. 0020-01-.06 EXAMINATIONS

Tenn. Comp. R. & Regs. 0020-01-.07 CHEATING

Tenn. Comp. R. & Regs. 0020-01-.08 RENEWAL OF LICENSES

Tenn. Comp. R. & Regs. 0020-01-.09 DENIAL OF CERTIFICATE

Tenn. Comp. R. & Regs. 0020-01-.10 REINSTATEMENT OF REVOKED OR SUSPENDED LICENSES

Tenn. Comp. R. & Regs. 0020-01-.11 APPLICATION AND RENEWAL OF CPA AND PA FIRM PERMITS

Tenn. Comp. R. & Regs. 0020-01-.12 NOTIFICATION OF FIRM CHANGES

Tenn. Comp. R. & Regs. 0020-01-.13 INTERSTATE PRACTICE

Tenn. Comp. R. & Regs. 0020-01-.14 INTERNATIONAL RECIPROCITY

Tenn. Comp. R. & Regs. 0020-01-.15 REPEALED

Chapter 0020-02 Educational and Experience Requirements

Tenn. Comp. R. & Regs. 0020-02-.01 RECOGNIZED COLLEGES AND UNIVERSITIES

Tenn. Comp. R. & Regs. 0020-02-.02 EDUCATION

Tenn. Comp. R. & Regs. 0020-02-.03 EXPERIENCE

Chapter 0020-03 Rules of Professional Conduct

Tenn. Comp. R. & Regs. 0020-03-.01 DEFINITIONS

Tenn. Comp. R. & Regs. 0020-03-.02 APPLICABILITY

Tenn. Comp. R. & Regs. 0020-03-.03 INDEPENDENCE

Tenn. Comp. R. & Regs. 0020-03-.04 INTEGRITY AND OBJECTIVITY

Tenn. Comp. R. & Regs. 0020-03-.05 CONTINGENT FEES, COMMISSIONS, AND OTHER CONSIDERATION

Tenn. Comp. R. & Regs. 0020-03-.06 DISCLOSURES

Tenn. Comp. R. & Regs. 0020-03-.07 COMPETENCE

Tenn. Comp. R. & Regs. 0020-03-.08 COMPLIANCE WITH STANDARDS

Tenn. Comp. R. & Regs. 0020-03-.09 ;

Tenn. Comp. R. & Regs. 0020-03-.10 CONFIDENTIAL CLIENT INFORMATION

Tenn. Comp. R. & Regs. 0020-03-.11 RECORDS

Tenn. Comp. R. & Regs. 0020-03-.12 DISCREDITABLE ACTS

Tenn. Comp. R. & Regs. 0020-03-.13 ACTING THROUGH OTHERS

Tenn. Comp. R. & Regs. 0020-03-.14 ADVERTISING AND OTHER FORMS OF SOLICITATION

Tenn. Comp. R. & Regs. 0020-03-.15 FIRMS

Tenn. Comp. R. & Regs. 0020-03-.16 NOTIFICATION TO THE BOARD

Tenn. Comp. R. & Regs. 0020-03-.17 RETENTION OF RECORDS

Chapter 0020-04 Disciplinary Action and Civil Penalties

Tenn. Comp. R. & Regs. 0020-04-.01 DEFINITIONS

Tenn. Comp. R. & Regs. 0020-04-.02 CIVIL PENALTIES

Tenn. Comp. R. & Regs. 0020-04-.03 GROUNDS FOR DISCIPLINE AGAINST LICENSEES

Tenn. Comp. R. & Regs. 0020-04-.04 REPEALED

Tenn. Comp. R. & Regs. 0020-04-.05 REVIEW OF PROFESSIONAL WORK PRODUCT

Tenn. Comp. R. & Regs. 0020-04-.06 SAFE HARBOR LANGUAGE

Chapter 0020-05 Continuing Education

Tenn. Comp. R. & Regs. 0020-05-.01 DEFINITIONS

Tenn. Comp. R. & Regs. 0020-05-.02 PURPOSE

Tenn. Comp. R. & Regs. 0020-05-.03 .

Tenn. Comp. R. & Regs. 0020-05-.04 QUALIFYING PROGRAMS

Tenn. Comp. R. & Regs. 0020-05-.05 SPONSORS

Tenn. Comp. R. & Regs. 0020-05-.06 CONTROL AND REPORTING SYSTEM

Tenn. Comp. R. & Regs. 0020-05-.07 EXTENSION OF TIME

Tenn. Comp. R. & Regs. 0020-05-.08 FAILURE TO MEET CPE REQUIREMENTS

Chapter 0020-06 Peer Review Program

Tenn. Comp. R. & Regs. 0020-06-.01 DEFINITIONS

Tenn. Comp. R. & Regs. 0020-06-.02 PURPOSE

Tenn. Comp. R. & Regs. 0020-06-.03 PEER REVIEW OVERSIGHT COMMITTEE

Tenn. Comp. R. & Regs. 0020-06-.04 BASIC REQUIREMENTS

Tenn. Comp. R. & Regs. 0020-06-.05 SPONSORING ORGANIZATIONS, PROGRAMS, AND STANDARDS

Tenn. Comp. R. & Regs. 0020-06-.06 REPEALED

Tenn. Comp. R. & Regs. 0020-06-.07 PEER REVIEW SUBMISSION

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