Chapter 4701-13 | Registration of Offices, Partnerships, and Corporations

Rule 4701-13-01 | Definitions.

• Effective: September 1, 2020
• Promulgated Under: 119.03

The following words and terms, when used in this chapter, shall have the following meanings:

(A) "Acceptance letter" means a letter issued by the peer review sponsoring organization which communicates acceptance of a peer review, and contains the name and address of the firm under review, the period covered by the peer review, the results of the peer review, and the date of acceptance and information related to the acceptance of the review.

(B) "Attest engagement" is defined in rule 4701-9-05 of the Administrative Code.

(C) "Completion letter" means a letter issued by the peer review sponsoring organization which communicates to the firm that all remedial actions specified in a prior acceptance letter have been completed and the peer review is complete.

(D) "Conditional acceptance letter" means an acceptance letter which communicates acceptance of a peer review subject to completion of remedial actions and the date the remedial actions must be completed.

(E) "Engagement" means an agreement that describes the business relationship between a client and a CPA or public accounting firm that defines the scope, terms, and costs of the agreement as performed by the CPA or public accounting firm.

(F) "Letter of response" means a formal letter issued from the peer review firm to the peer review committee, in response to deficiencies communicated in a conditional acceptance letter.

(G) "Peer review" means the study and appraisal, by an independent evaluator, of a public accounting firm's system of quality control to assure it is designed in conformity with professional standards to perform accounting and auditing work ("system review"); or of a sample of a the firm's actual accounting work and procedures ("engagement review").

(H) "Peer review committee" means the peer review acceptance committee of the peer review sponsoring organization or the national peer review committee of the "American Institute of Certified Public Accountants," authorized pursuant to division (G)(1) of section 4701.04 of the Revised Code.

(I) "Peer review firm" or "attest firm" means a business or permit holder registered with the board that performs or offers to perform work on any engagement that will result in the issuance of any report in accordance with professional standards as defined in rule 4701-9-03, 4701-9-04, 4701-9-05, or 4701-9-06 of the Administrative Code, including audits, compilations, and reviews.

(J) "Peer review oversight committee" is defined in paragraph (A)(6) of rule 4701-1-10 of the Administrative Code.

(K) "Peer review program administrator" means any organization authorized by the board to administer all or part of the board's peer review program as specified in division (G) of section 4701.04 of the Revised Code. The "Ohio Society of Certified Public Accountants" is the board's authorized peer review program administrator and agent pursuant to division (G) of section 4701.04 of the Revised Code.

(L) "Peer review report" means a report issued by an independent evaluator which summarizes the nature, objectives, scope, limitations, and procedures performed by a public accounting firm that accepts engagements subject to peer review, and assigns a rating to the firm's reviewed work based on peer review standards set by the "American Institute of Certified Public Accountants."

(M) "Peer review sponsoring organization" means any organization approved by the board that meets the peer review standards specified in rule 4701-13-05 of the Administrative Code.

(N) "Practice of public accounting" is defined in rule 4701-7-04 of the Administrative Code.

(O) "Professional liability insurance" means any of the following:

(1) Commercially available professional liability insurance or a professional liability insurance program;

(2) A deposit in trust or in bank escrow of cash, bank certificates of deposit, or United States treasury obligations;

(3) A bank letter of credit or insurance company bond.

(P) "Public accounting firm" means a business or permit holder registered with the board that performs or offers to perform work on any engagement defined as the practice of public accounting per rule 4701-7-04 of the Administrative Code, and that advertises as performing or offering to perform either public accounting services or regulated services pursuant to sections 4701.12 and 4701.14 of the Revised Code.

(Q) "Regulated services" is defined in rule 4701-7-04 of the Administrative Code.

(R) "Relevant oversight or government organization" means an entity, agency, or body which is responsible for the assessment (review?) and administration of specific functions under its jurisdiction and retains authority over those functions.

(S) "Tax/consulting firm" or "non-attest firm" means a business or permit holder that furnishes advice on tax matters, provides consulting services, personal financial planning services, or other services that do not result in the issuance of any report in accordance with professional standards as defined in rule 4701-9-03, 4701-9-04, 4701-9-05, or 4701-9-06 of the Administrative Code while advertising to the public using the CPA or PA designation.

Supplemental Information

Authorized By: 4701.03, 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025

Rule 4701-13-02 | Public accounting firm registration requirements, renewal deadlines.

• Effective: May 1, 2023
• Promulgated Under: 119.03

(A) All public accounting firms shall pay an initial registration fee based on the number of certified public accountants employed by the firm:

(1) A public accounting firm that employs up to four Ohio permit holders shall pay an initial registration fee of thirty dollars.

(2) A public accounting firm that employs five to nine Ohio permit holders shall pay an initial registration fee of ninety dollars.

(3) A public accounting firm that employs ten or more Ohio permit holders shall pay an initial registration fee of one hundred eighty dollars.

(B) All public accounting firms shall pay a renewal fee based on the number of certified public accountants employed by the firm:

(1) A public accounting firm that employs up to four Ohio permit holders shall pay a renewal fee of ninety dollars.

(2) A public accounting firm that employs five to nine Ohio permit holders shall pay a renewal fee of one hundred eighty dollars.

(3) A public accounting firm that employs ten or more Ohio permit holders shall pay a renewal fee of three hundred sixty dollars.

(C) Any public accounting firm, business or CPA permit holder that performs or offers to perform services or engagements which result in the issuance of an attest report must notify the board of this fact within ninety days of the initial engagement agreement date and register with the board as a peer review firm pursuant to section 4701.04 of the Revised Code.

(D) Any business or CPA permit holder that does not perform any engagements which result in the issuance of an attest report and is exempt from peer review requirements; and that assumes or uses the titles or designations "certified public accountant" or "public accountant," or the abbreviations "CPA" or "PA," must register as a tax/consulting firm with the board and obtain a firm registration.

(E) A holder of a CPA permit who does not advertise or hold out to the public using the titles or designations "certified public accountant" or "public accountant," or the abbreviations "CPA" or "PA," may voluntarily register with the board and obtain a tax/consulting firm registration.

(F) The renewal deadlines for registration of public accounting firms are as follows:

(1) A public accounting firm that performs or offers to perform engagements subject to peer review must renew its firm registration by October thirty-first of the year assigned by the board to the firm. The firm must submit to the board all required firm registration renewal information by that date, including documentation of an approved peer review not previously submitted to the board.

(2) A public accounting firm that does not perform any engagement subject to peer review, and that uses the designation "certified public accountant," the abbreviation "CPA," "public accountant," or the abbreviation "PA" must renew its firm registration by August thirty-first of the year assigned by the board to the firm. The firm must submit to the board all required firm registration renewal documentation by that date.

(G) A conditional firm registration may be issued to a public accounting firm that submits a conditional acceptance letter issued by the peer review committee, with final approval of the peer review subject to completion of one or more requirements as outlined in the conditional acceptance letter. The firm must provide to the board a completion letter issued by the peer review committee within thirty days of the completion date set in the conditional acceptance letter, or the conditional firm registration will expire.

(H) A public accounting firm that does not comply with the requirements in paragraph (E)(1), (E)(2), or (F) of this rule shall be considered in violation of divisions (A)(9) and (A)(11) of section 4701.16 of the Revised Code and may be subject to disciplinary action in accordance with division (B) of that section. In addition, the firm shall be assessed a penalty fee based upon the number of licensees in the firm. The amount of the penalty fee shall be determined as follows:

(1) A public accounting firm that performs engagements subject to peer review, and employs up to four Ohio permit holders or foreign certificate holders, shall pay a penalty fee of one hundred fifty dollars. The penalty fee will increase to three hundred dollars on February first of the following year the firm's registration renewal was due.

(2) A public accounting firm that performs engagements subject to peer review, and employs five to nine Ohio permit holders or foreign certificate holders, shall pay a penalty fee of three hundred sixty dollars. The penalty fee will increase to seven hundred dollars on February first of the following year the firm's registration renewal was due.

(3) A public accounting firm that performs engagements subject to peer review, and employs ten or more Ohio permit holders or foreign certificate holders, shall pay a penalty fee of nine hundred dollars. The penalty fee will increase to one thousand eight hundred dollars on February first of the following year the firm's registration renewal was due.

(4) A public accounting firm that does not perform engagements subject to peer review, and employs up to four Ohio permit holders or foreign certificate holders, shall pay a penalty fee of one hundred fifty dollars. The penalty fee will increase to three hundred dollars on December first of the year the firm's registration renewal is due.

(5) A public accounting firm that does not perform engagements subject to peer review, and employs five to nine Ohio permit holders or foreign certificate holders, shall pay a penalty fee of three hundred sixty dollars. The penalty fee will increase to seven hundred dollars on December first of the year the firm's registration renewal is due.

(6) A public accounting firm that does not perform engagements subject to peer review, and employs ten or more Ohio permit holders or foreign certificate holders, shall pay a penalty fee of nine hundred dollars. The penalty fee will increase to one thousand eight hundred dollars on December first of the year the firm's registration renewal is due.

Last updated May 1, 2023 at 8:49 AM

Supplemental Information

Authorized By: 4701.03, 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025
Prior Effective Dates: 11/5/1992, 6/3/1993, 12/10/1993, 10/22/2004, 7/16/2009, 1/15/2010, 9/12/2015

Rule 4701-13-03 | Public accounting firm insurance requirement.

• Effective: September 1, 2020
• Promulgated Under: 119.03

Each public accounting firm in Ohio not organized as a proprietorship or general partnership shall provide written evidence satisfactory in form and substance to the board and shall provide a certification satisfactory in form and substance to the board as part of its triennial registration that it has purchased and will maintain in effect until its next registration professional liability insurance as follows:

(A) Public accounting firms with up to four partners, shareholders, members or other Ohio permit holders or foreign certificate holders shall purchase and maintain no less than two hundred fifty thousand dollars of professional liability insurance.

(B) Public accounting firms with five to nine partners, shareholders, members or other Ohio permit holders or foreign certificate holders shall purchase and maintain no less than five hundred thousand dollars of professional liability insurance.

(C) Public accounting firms with ten or more partners, shareholders, members or other Ohio permit holders or foreign certificate holders shall purchase and maintain no less than one million dollars of professional liability insurance.

Supplemental Information

Authorized By: 4701.03, 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025
Prior Effective Dates: 7/5/1984, 9/19/1994, 7/31/2003, 10/22/2004, 4/28/2011

Rule 4701-13-04 | Change of peer review firm registration status.

• Effective: September 1, 2020
• Promulgated Under: 119.03

A peer review firm may change its registration status to tax/consulting or non-attest if at least one of the following criteria has been met:

(A) The firm submits an affidavit to the board confirming the firm has not performed any engagement(s) subject to peer review standards since the firm's last peer review.

(B) The firm submits to the board documentation from the AICPA peer review committee confirming the firm's engagement(s) are not subject to peer review.

(C) The firm submits proof of a completed peer review along with all applicable attachments per rule 4701-13-07 of the Administrative Code, including an acceptance letter or completion letter from the peer review committee, if the firm performed any engagement(s) subject to peer review requirements since its last peer review.

Supplemental Information

Authorized By: 4701.03, 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025
Prior Effective Dates: 9/12/2015

Rule 4701-13-05 | Change of firm name or ownership.

• Effective: September 1, 2020
• Promulgated Under: 119.03

(A) A public accounting firm that changes its name shall notify the board within thirty days of the effective date of the change.

(B) If two or more public accounting firms subject to peer review requirements are merged by any legal means, then the surviving public accounting firm shall retain the latest firm registration deadline of the former public accounting firms.

(C) If any public accounting firm subject to peer review requirements is purchased, or otherwise acquired by another public accounting firm, the firm acquiring the previous firm's client records will accept responsibility for those client records subject to examination at the purchasing firm's next scheduled peer review.

(D) If two or more public accounting firms are merged by any legal means and not all of the merging public accounting firms are subject to peer review requirements, then the surviving public accounting firm shall be subject to peer review requirements and retain the latest firm registration deadline of any former public accounting firm subject to peer review, except that twelve months must elapse between the time of the merger and the surviving public accounting firm's next registration deadline.

(E) If two or more public accounting firms are merged by any legal means and none of the former public accounting firms are subject to peer review requirements, then the new public accounting firm must complete a peer review within eighteen months of the date of initial registration with the board.

(F) If a public accounting firm subject to peer review requirements is divided, then each new public accounting firm shall be subject to peer review requirements and retain the firm registration deadline of the former public accounting firm, except that at least twelve months must elapse before the new public accounting firms must renew their firm registrations.

(G) If a public accounting firm is dissolved and subsequently reestablished as another public accounting firm with substantially similar ownership, then the successor public accounting firm will retain the predecessor public accounting firm's firm registration renewal deadline.

(H) The executive director, subject to board approval may change a firm's registration renewal deadline for just cause.

Supplemental Information

Authorized By: 4701.03, 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025

Rule 4701-13-06 | Peer review program standards.

• Effective: September 1, 2020
• Promulgated Under: 119.03

(A) The board hereby adopts "Standards for Performing and Reporting on Peer Reviews" promulgated by the "American Institute of Certified Public Accountants" and published on that organization's website (www.aicpa.org) as its minimum standards for peer review of public accounting firms. No public accounting firm shall be required to become a member of any peer review sponsoring organization.

(B) Peer review sponsoring organizations shall include the "American Institute of Certified Public Accountants" peer review program, "The Ohio Society of Certified Public Accountants" peer review program, and other such organizations which register with and are approved by the board based upon their adherence to the peer review standards defined in paragraph (A) of this rule.

(C) The firm or entity selected to conduct a peer review for any public accounting firm not currently enrolled in an approved peer review program must be approved to conduct the peer review by the board or its authorized peer review program administrator prior to commencement of the peer review.

(D) The peer review program administrator may charge a fee to firms required to participate in the peer review program in order to cover the costs of program administration. The board shall approve this fee annually.

(E) Any peer review completed in accordance with the standards defined in paragraph (A) of this rule must be submitted for approval to the board's authorized peer review program administrator. Theboard's authorized peer review program administrator shall issue an acceptance letter to the public accounting firm for which a peer review was performed if the designated peer review committee, defined in rule 4701-13-01 of the Administrative Code, deems the firm's peer review completed.

(F) Based upon the peer review outcome as stated in the acceptance letter, the board or its authorized peer review program administrator may impose remedial actions pursuant to division (H)(1)(a) of section 4701.04 of the Revised Code, which the public accounting firm must complete as a condition for continued registration under this chapter.

(1) After the firm completes the required remedial actions, the board's authorized peer review program administrator will issue a completion letter to the firm. Only a completion letter issued by the board's authorized peer review program administrator will qualify a public accounting firm for continued registration under this chapter.

(2) Any request for an extension of time to complete remedial actions must be submitted in writing and approved by the peer review program administrator. Any approved extension of time must be submitted to the board in order to extend a conditional firm registration deadline.

(3) The completion date for remedial actions contained in the conditional acceptance letter may be extended for good cause by the executive director, subject to board approval, for the purpose of maintaining a conditional firm registration.

(G) The board may take disciplinary action against a public accounting firm that does not comply with any remedial action mandated in accordance with paragraph (F) of this rule or under division (A)(11) of section 4701.16 of the Revised Code.

Supplemental Information

Authorized By: 4701.03, 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025

Rule 4701-13-07 | Required submission of peer review documents.

• Effective: September 1, 2020
• Promulgated Under: 119.03

(A) Each public accounting firm that completes a peer review must submit to the board prior to the firm's October thirty-first registration deadline, an acceptance letter regarding the most recent peer review and all applicable attachments. Applicable attachments may include:

(1) Peer review report

(2) Acceptance letter

(3) Letter of response

(4) Completion letter

(B) Subject to the approval of the executive director, the board may accept a conditional acceptance letter for purposes of paragraph (A) of this rule. The conditional acceptance letter shall be valid contingent upon receipt of a completion letter within thirty days of the deadline stated in the conditional acceptance letter.

(C) A firm receiving a notice of recall or modification of the firm's peer review acceptance letter or completion letter shall provide to the board a copy of the recall or modification letter and the firm's response within fourteen days of the date on the recall or modification letter.

(D) A firm receiving a second consecutive peer review rating of "Fail" shall provide to the board a copy of the most recent peer review report and conditional acceptance letter within fourteen days of the date of the conditional acceptance letter. The firm must also provide its letter of response to the board at the same time the letter is submitted to the administering entity.

(E) Failure to comply with the provisions of this rule shall be a violation of division (A)(4) of section 4701.16 of the Revised Code.

Supplemental Information

Authorized By: 4701.03, 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025
Prior Effective Dates: 10/22/2004, 9/12/2015

Rule 4701-13-08 | Retention of documents relating to peer reviews.

• Effective: September 1, 2020
• Promulgated Under: 119.03

(A) Each public accounting firm subject to peer review shall maintain in its records all documentation necessary to establish that each peer review performed by a qualified peer reviewing firm conformed to the peer review standards defined in paragraph (A) of rule 4701-13-06 of the Administrative Code. The documentation maintained by the public accounting firm includes the following:

(1) Documentation of reviewing firm qualifications;

(2) Copies of all peer review reports;

(3) All comment letters related to each peer review, including findings for further consideration (FFC) forms.

(4) All correspondence which indicates the public accounting firm's concurrence or non concurrence with the results of the peer review; and

(5) All proposed remedial actions and all information relevant to those remedial actions, including implementation and/or completion of the remedial actions.

(B) The documents described in paragraph (A) of this rule shall be retained by the public accounting firm for a period corresponding to the retention period of the relevant oversight or government organization and shall be made available upon request to the board. The public accounting firm receiving the review is responsible for the submssion of all reports and supporting documentation to the board as required by rule 4701-13-07 of the Administrative Code.

(C) Failure to comply with the provisions of this rule shall be a violation of division (A)(4) of section 4701.16 of the Revised Code.

Supplemental Information

Authorized By: 4701.03, 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025
Prior Effective Dates: 8/5/1999, 7/31/2003

Rule 4701-13-09 | Peer review deficiencies; hearings.

• Effective: September 1, 2020
• Promulgated Under: 119.03

(A) The board may rely on the peer review acceptance letter issued by the peer review committee, defined in rule 4701-13-01 of the Administrative Code, and related peer review supporting documentation as prima facie evidence in any disciplinary hearing involving a public accounting firm arising under division (H) of section 4701.04 of the Revised Code held in accordance with Chapter 119. of the Revised Code.

(B) If the board determines that the peer review described in paragraph (A) of this rule contains one or more violations of the professional standards defined in Chapter 4701-9 of the Administrative Code, the board may take appropriate disciplinary action under division (B) of section 4701.16 of the Revised Code and held in accordance with Chapter 119. of the Revised Code.

Supplemental Information

Authorized By: 4701.04
Amplifies: 4701.04
Five Year Review Date: 9/1/2025
Prior Effective Dates: 8/11/2003, 7/16/2009