The following words and phrases when used in this act shall have the meanings ascribed to them in this section unless the context clearly indicates otherwise:

“AICPA.” The American Institute of Certified Public Accountants.

“Attest activity.” The provision of any of the following services together with the issuance of a report expressing or disclaiming an opinion or other assurance on the information:

(1) an audit or other engagement performed in accordance with Statements on Auditing Standards (SAS);

(2) a review or compilation of a financial statement performed in accordance with Statements on Standards for Accounting and Review Services (SSARS);

(3) an engagement performed in accordance with Statements on Standards for Attestation Engagements (SSAE);

(4) an audit or other engagement performed in accordance with government auditing standards issued by the Comptroller General of the United States; or

(5) any other engagement performed in accordance with attestation standards established by an organization granted authority by statute or regulation to establish attestation standards, such as the American Institute of Certified Public Accountants (AICPA) or the Public Company Accounting Oversight Board (PCAOB).

“Board.” The State Board of Accountancy.

“Business unit.” A functional group of individuals in a firm or a sole practitioner performing attest activity.

“Certificate.” A certificate as “certified public accountant” issued under this act or a corresponding right to practice as a certified public accountant issued after examination under the law of another jurisdiction.

“Certified public accountant.” An individual to whom a certificate has been issued.

“Client.” Any person that agrees orally, in writing or in electronic form, with a certified public accountant, public accountant or firm to receive a professional service.

“Commission.” Compensation for recommending or referring a product or service to be supplied by another person. The term does not include a referral fee.

“Compilation.” A service performed in accordance with Statements on Standards for Accounting and Review Services (SSARS) that presents, in the form of financial statements, information that is the representation of management or the owners without undertaking to express any assurance on the statements.

“Department.” The Department of State acting through the Commissioner of Professional and Occupational Affairs.

“Engagement review.” A peer review process which provides the reviewer with a reasonable basis for expressing limited assurance that:

(1) the financial statements or information and the related accountant's report on the accounting, review and attestation engagements submitted for review conform with the requirements of professional standards in all material respects; and

(2) the reviewed firm's documentation conforms with the requirements of Statements on Standards for Accounting and Review Services (SSARS) and Statements on Standards for Attestation Engagements (SSAE) applicable to those engagements in all material respects.

“Equity interest.” Any type of ownership interest in a firm. The term includes the right to vote with respect to any issue, whether or not the right to vote is coupled with an interest in the profits or assets of the firm.

“Examination.” The examination for the certificate of certified public accountant provided for in section 3.1(b)¹ of this act.

“Firm.” A qualified association that is a licensee.

“Forensic accounting services.” The application of specialized knowledge and investigative skills possessed by a licensee, qualified nonlicensee or qualified association to collect, analyze and evaluate evidential matter and to interpret and communicate findings in a courtroom, boardroom or other legal or administrative venue.

“Holding out” or “hold out.” Any representation of the fact that a person, or an individual associated in any way with a person, holds a certificate of certified public accountant, a registration as a public accountant or a license, made in connection with the performance of, or an offer to perform, services for the public. A representation shall be deemed to include any oral or written communication conveying the fact that the person or individual holds a certificate, registration or license, including, without limitation, the use of titles or legends on letterheads, business cards, office doors, advertisements and listings or the displaying of a certificate, registration or license.

“Internal auditor.” An individual within a governmental or private entity who performs an audit function that requires the individual to be independent of the activities being audited. The independence required of an internal auditor does not need to meet the standard of independence required of a certified public accountant or public accountant.

“Licensee.” An individual certified by or registered with the board and holding a current license to practice under section 8.2² of this act or a qualified association holding a current license to practice under section 8.8³ of this act. The term does not include a person on inactive status under section 8.2(a.1) of this act or otherwise not holding a current license.

“NASBA.” The National Association of State Boards of Accountancy.

“PCAOB.” The Public Company Accounting Oversight Board.

“Peer review.” A study, appraisal or review of one or more aspects of the professional work of an individual or firm in the practice of public accounting to determine the degree of compliance by the individual or firm with generally accepted accounting principles and auditing standards and other generally accepted technical standards, conducted by persons who hold current licenses to practice public accounting under the laws of this Commonwealth or another state and who are not affiliated with the individual or firm being reviewed.

“Principal place of business.” The location of the principal office where a certified public accountant practices public accounting.

“Professional services.” Services performed by a certified public accountant, public accountant or firm:

(1) as part of the practice of public accounting; or

(2) that would be part of the practice of public accounting except that the individual performing the services does not hold out as a certified public accountant or public accountant.

“Public accountant.” An individual who was qualified and accepted for registration in accordance with former section 8.7⁴ of this act.

“Public accounting.” Offering to perform or performing for a client or potential client:

(1) Attest activity.

(2) Other services involving the use of accounting skills, including, but not limited to, management advisory or consulting services, business valuations, financial planning, preparation of tax returns or furnishing of advice on tax matters by a person holding out as a certified public accountant, public accountant or firm.

“Qualified association.” An association as defined in 15 Pa.C.S. § 102 (relating to definitions) that is incorporated or organized under the laws of this Commonwealth or any other state or foreign jurisdiction if the organic law under which the association is incorporated or organized does not afford the shareholders, partners, members or other owners of equity interests in the association or the officers, employes or agents of the association greater immunity than is available to the shareholders, officers, employes or agents of a professional corporation under 15 Pa.C.S. § 2925 (relating to professional relationship retained)

“Qualified nonlicensee.” An individual who does not hold a current license or permit to practice public accounting in this Commonwealth or any other state or foreign jurisdiction.

“Referral fee.” Compensation paid to a licensee for recommending another licensee to, or referring to another licensee, any person for the performance by the other licensee of public accounting.

“Report.” Any opinion, statement or other form of written communication that states or implies assurance as to the reliability of any attested information, compiled financial statements or assessments of the status or performance of any person and that also implies or is accompanied by any statement or implication that the person issuing it has special knowledge or competence in accounting or auditing. Such a statement or implication of special knowledge or competence may arise from use by the issuer of the communication of names or titles indicating that the issuer or any individual employed by or affiliated with it is an accountant or auditor or may arise from the language of the communication itself. The term includes any form of language which disclaims an opinion when the form of language is conventionally understood to imply any positive assurance as to the reliability of the attested information or compiled financial statements referred to or special competence on the part of the person issuing the language. The term also includes any other form of language that is conventionally understood to imply assurance or special knowledge or competence.

“Statements on Auditing Standards (SAS).” The Statements on Auditing Standards or any similar professional standard which supersedes such statements.

“Statements on Standards for Attestation Engagements (SSAE).” The Statements on Standards for Attestation Engagements or any similar professional standard which supersedes such statements.

“Statements on Standards for Accounting and Review Services (SSARS).” The Statements on Standards for Accounting and Review Services or any similar professional standard which supersedes such statements.

“Substantial equivalency.” The fact that:

(1) the education, examination and experience requirements contained in the statutes and regulations of another jurisdiction are comparable to or exceed the education, examination and experience requirements contained in this act; or

(2) a certified public accountant's education, examination and experience qualifications are comparable to or exceed the education, examination and experience requirements contained in this act.

“System review.” A peer review process which provides the reviewer with a reasonable basis for expressing an opinion on whether, during the year under review:

(1) the reviewed firm's system of quality control for its accounting and auditing practice has been designed in accordance with quality control standards established by the American Institute of Certified Public Accountants; and

(2) is being complied with to provide the firm with reasonable assurance of conforming with professional standards in all material respects.