Section 338.5101. Definitions.

Rule 101. (1) As used in these rules:

(a)     "Act" means 1980 PA 299, MCL 339.101 to 339.2919, and known as the occupational code.

(b)     "Audit" or "examination" means an examination applying generally accepted auditing standards, including any procedure undertaken to verify or test the reasonableness of financial information with a view of expressing an opinion or commenting on the fairness of the presentation.

(c)    "Attest services" means an audit, review, or agreed upon procedures engagement performed in accordance with applicable professional standards pursuant to R 338.5101(l), R 338.5101(m), R 338.5102, and R 338.5103.

(d)  "Board" means the Michigan state board of accountancy.

(e)    “Certified public accountant" or “CPA” means a person holding a certificate of certified public accountant granted by the department, or an individual with practice privileges.

(f)   "Client" means the person or persons or entity that retains an individual licensee, a firm licensee, individual with practice privileges, or an out-of-state firm, for the performance of professional services.

(g)    "Continuing education period" means all or part of a year beginning July 1 and ending June 30.

(h)   "Disclose" means to provide a written communication from a CPA or a CPA firm informing the client, prior to making a recommendation or referral, that the CPA or CPA firm will receive a commission, referral fee, or contingency fee from a third party for recommendations or referrals of products and/or services.

(i)    "Enterprise" means a person, persons, or entity for which an individual licensee, a firm licensee, an individual with practice privileges, or an out-of state firm performs professional services.

(j)   “Exam window” means the time in each calendar quarter in which the uniform CPA examination is offered.    There are 4 exam windows in each calendar year, the first 2

months of each calendar quarter: January 1 to February 28 (or 29), April 1 to May 31, July 1 to August 31, and October 1 to November 30.

(k)    "Financial statements" means statements and related footnotes that show financial position, results of operations, and cash flows on the basis of generally accepted accounting principles or another comprehensive basis of accounting. The term does not include incidental financial data included in management advisory services reports to support recommendations to a client and does not include tax returns and supporting schedules of tax returns.

(l)       "Generally accepted accounting principles" means accounting principles of professional conduct, promulgated by the applicable nationally or internationally recognized professional standard setting organization, related to individual accounting engagements.

(m)         "Generally accepted auditing standards" means the standards of professional conduct, promulgated by the applicable nationally or internationally recognized professional standard setting organization, related to individual audit engagements.

(n)   “Individual with practice privileges” means an individual who practices in this state pursuant to MCL 339.727a.

(o)    “Licensee” means the holder of an individual license under MCL 339.727 or the holder of a firm licensed under MCL 339.728.

(p)  “Out-of-state firm” means a firm that is permitted to provide certain services and use the title “CPA firm” without obtaining a Michigan firm license under MCL 339.728 under the conditions in MCL 339.728(5) and (6).

(q)   "Professional engagement" means an agreement between a client and an individual licensee, a firm licensee, an individual with practice privileges, or an out-of-state firm relative to the performance of professional services.

(r)   "Professional services" means any services performed or offered to be performed by an individual licensee, a firm licensee, an individual with practice privileges, or an out- of-state firm for a client in the course of the practice of public accounting, pursuant to MCL 339.720.

(s)    "Qualifying hours" means continuing education hours that comply with part 3 of these rules.

(t)      "State" means the 50 states of the United  States  of  America, Washington, D.C., Puerto Rico, Guam, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands.

(2) Terms defined in the act have the same meanings when used in these rules.

History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2007 AACS; 2013 AACS.