Statutes, codes, and regulations
Delaware Administrative Code
Title 24 - Regulated Professions and OccupationsDepartment of StateDivision of Professional Regulation
Board of Accountancy
Section 100-10.0 - Firm Permits to Practice

24 Del. Admin. Code § 100-10.0

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Current through Register Vol. 28, No. 5, November 1, 2024
Section 100-10.0 - Firm Permits to Practice
10.1 A CPA firm that does not maintain an office in Delaware and is practicing certified public accountancy through an individual practicing pursuant to the practice privilege afforded by 24 Del.C. § 109 and Section 8.0 is not required to have a CPA firm permit to practice or otherwise notify the Board.
10.2 Each firm which intends to be or is engaged in the practice of public accountancy in Delaware shall be required to obtain and maintain a valid permit to practice. A sole proprietor is required to hold both an individual permit to practice public accountancy and a firm permit to practice public accountancy.
10.3 Each firm that is engaged in the practice of certified public accountancy with an office in Delaware shall be required to obtain and maintain a valid permit to practice certified public accountancy. A sole proprietor is required to hold both an individual permit to practice certified public accountancy and a firm permit to practice certified public accountancy.
10.4 Each applicant for issuance of an initial firm permit to practice certified public accountancy must be enrolled in a peer review program pursuant to subsection 10.12.
10.5 Requirements
10.5.1 Each applicant for issuance or renewal of a firm permit to practice public accountancy shall be required to show that:
10.5.1.1 Each principal who performs services in Delaware, who performs services for a client located in Delaware, or who is responsible for the accounting work in Delaware, holds a valid Delaware individual permit to practice public accountancy or certified public accountancy; and
10.5.1.2 Each employee who performs services in Delaware or who performs services for a client located in Delaware holds a valid individual permit to practice public accountancy or certified public accountancy.
10.5.2 For purposes of 24 Del.C. § 110 and this Section, employees of a firm with its principal offices outside of Delaware that work in excess of 80 hours in Delaware or who work for a client in Delaware must have a valid Delaware individual permit to practice.
10.6 Each applicant for issuance of an initial firm permit to practice public accountancy must be enrolled in a peer review program pursuant to subsection 10.12.
10.7 An applicant for issuance or renewal of a firm permit to practice certified public accountancy or public accountancy shall be required to register each office of the firm within Delaware with the Board, and to show that each such office is under the charge of a person holding a valid Delaware permit to practice.
10.8 Notification of changes by firms.
10.8.1 A firm registered pursuant to 24 Del.C. § 111 shall file with the Board a written notification of any of the following events concerning the practice of certified public accountancy or public accountancy within Delaware within 30 days after its occurrence:
10.8.1.1 Formation of a new firm;
10.8.1.2 Addition of a partner, member, manager or shareholder;
10.8.1.3 Retirement, withdrawal or death of a partner, member, manager or shareholder;
10.8.1.4 Any change in the name of the firm;
10.8.1.5 Termination of the firm;
10.8.1.6 Change in the management of any branch office in Delaware;
10.8.1.7 Establishment of a new branch office or the closing or change of address of a branch office in Delaware; and
10.8.1.8 Issuance of the firm's first issued financial statements and accountant's reports for each level of service described in subsection 10.12; or
10.8.1.9 The occurrence of any event or events which would cause such firm not to be in conformity with the provisions of the Delaware Code or this regulation.
10.8.2 In the event of any change in legal form of a firm, such new firm shall within 30 days of the change file an application for an initial permit in accordance with this regulation and pay the fee required by this regulation.
10.9 Certified public accounting and public accounting firms practicing as corporations organized pursuant to Delaware law must be organized in compliance with The Professional Service Corporation Act, 8 Del.C. § 601, et. seq.
10.10 All firms and accountants practicing in firms shall be bound by professional responsibility standards no less stringent than those stated in 8 Del.C. § 608. Each applicant for issuance or renewal of a firm permit to practice certified public accountancy or public accountancy shall be required to cause a duly authorized individual to verify under oath that upon issuance by the Board of a firm permit to practice, the firm will be bound by professional standards no less stringent than those stated in 8 Del.C. § 608.
10.11 Certified public accounting and public accounting firms may not practice using firms names that are misleading as to organization, scope, or quality of services provided.
10.12 Peer Review
10.12.1 Definitions. The following words and terms have the following definitions when used in Section 10.0:

"Enrollment in a peer review program" means a firm is required to follow all requirements of the peer review process, cooperate with those performing and administering the peer review, comply with the peer review standards and inform sponsoring organizations when firm changes occur.

"Peer review programs" mean the sponsoring organization's entire peer review process, including the standards for administering, performing, and reporting on peer reviews, oversight procedures, training, and related guidance materials. Peer review programs include any Board-approved peer review program, which utilizes standards for performing and reporting on peer reviews by a recognized national accountancy sponsoring organization whose standards are generally accepted by other regulatory authorities in the United States, including the AICPA Standards for Performing and Reporting on Peer Reviews.

"Peer review standards" mean the Board-approved professional standards for administering, performing and reporting on peer reviews.

"Peer reviewer/reviewing firm" means a certified public accounting firm responsible for conducting the peer review, holding a valid and active license to practice public accounting in good standing by Delaware or some other state, and meets the peer reviewer qualifications to perform peer reviews established in the Board-approved peer review standards.

"Sponsoring organization" means a Board-approved professional society, or other organization responsible for the facilitation and administration of peer reviews through use of its peer review program and peer review standards.

10.12.2 Enrollment in an approved peer review program, including peer review programs or other comparable programs that have been approved by the Board, as a condition for renewal of permit.
10.12.2.1 In furtherance of its duty to protect the public regarding attest and compilation services, the Board requires all firms offering or rendering such services to be enrolled in a Board-approved peer review program and to comply with the applicable standards and guidance of that program.
10.12.2.2 A firm is not required to enroll in a Board-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. However, if the firm elects to enroll in a Board-approved peer review program, it is required to have a peer review which would include preparation of financial statements within the scope of the review.
10.12.2.3 On and after July 1, 2017, each applicant for renewal of a permit to practice under 24 Del.C. § 108 or 24 Del.C. § 110 in the case of a permit holder who issues compilation reports to the public other than through a CPA or PA firm, and each applicant for renewal of a firm permit to practice under 24 Del.C. § 111 shall furnish in connection with their renewal, evidence of enrollment in a Board approved peer review program. Such evidence shall be at the Board's discretion and may consist of a check box on the renewal form. Further proof of enrollment shall be at the Board's discretion.
10.12.2.4 A firm enrolled in a Board-approved peer review program shall schedule, undergo and complete its initial peer review in compliance with the sponsoring organization's peer review standards and related guidance. Ordinarily, a firm's initial peer review is due 18 months from the date it enrolled or should have enrolled in a Board-approved peer review program.
10.12.2.5 A firm enrolled in a Board-approved peer review program shall schedule, undergo and complete its subsequent peer reviews in compliance with the sponsoring organizations peer review standards and related guidance. Subsequent peer reviews shall be completed such that the peer review has taken place and all peer review materials are submitted to the sponsoring organization within 3 years and 6 months from the peer review year end of the previous peer review.
10.12.2.6 The Board may accept extensions for completing peer reviews granted by sponsoring organizations provided the Board is notified by the firm within 14 days from the date of the letter from the sponsoring organization granting the extension. Extensions may be granted for the following reasons:
10.12.2.6.1 Health;
10.12.2.6.2 Military service; or
10.12.2.6.3 Other good cause clearly outside of the control of the firm. For good cause shown, the Board may grant or renew applications for a reasonable period of time pending completion of the firm's peer review.
10.12.3 Approved Peer Review Sponsoring Organizations, Programs and Peer Review Standards
10.12.3.1 The Board shall approve peer review sponsoring organizations, programs, and standards.
10.12.3.2 The Board adopts the AICPA as an approved sponsoring organization and its peer review program and the Pennsylvania Institute of CPAs or its successor and other peer review programs administered by entities fully involved in the administration of the AICPA Peer Review Program. These organizations are not required to submit an application for approval to the Board.
10.12.3.3 The Board may terminate its approval of a sponsoring organization for cause following notice and opportunity for hearing. For purposes of this paragraph, "cause" includes failure to maintain an ongoing compliance with the requirements of this chapter.
10.12.3.4 The Board may approve other peer review sponsoring organizations and programs. For an organization, not specifically identified in this regulation as Board-approved, to receive Board approval for its peer review program and standards, the organization must submit evidence to the satisfaction of the Board. At a minimum, the evidence shall include the standards, procedures, guidelines, oversight process, training materials and related documents used to administer, perform and accept peer reviews. The Board has the authority to request any other documents/information from an organization about its peer review program in determining whether to grant approval.
10.12.3.5 For firms required to be registered with and inspected by the Public Company Accounting Oversight Board ("PCAOB"), the Board accepts the PCAOB's inspection process for reviewing practices subject to its authority, which are not included in the scope of peer review programs. Firms receiving inspections under the PCAOB are also required to meet the peer review requirements under a Board-approved peer review program that covers the portion of the firm's practice not subject to the PCAOB permanent inspection.
10.12.4 Peer Review Oversight Committee
10.12.4.1 A Peer Review Oversight Committee ("PROC") may be appointed by the Board to monitor the Board-approved peer review program, including sponsoring organizations, to provide reasonable assurance that peer reviews are being conducted and reported on in accordance with peer review standards. The PROC shall report to the Board on the conclusions and recommendations reached as a result of its monitoring, including the continued approval of sponsoring organizations.
10.12.4.2 PROC members shall:
10.12.4.2.1 Not include individuals who are members of the Board or perform any enforcement related work for regulatory or governmental bodies, professional organizations, including an AICPA ethics committee, AICPA joint trial board for state professional ethics committee, or similar groups or subgroups.
10.12.4.2.2 Be subject to removal or replacement by the Board at its discretion.
10.12.4.2.3 Be required to sign a confidentiality agreement indicating they will not divulge any information to the Board that would identify any firm, licensee, or peer reviewer/reviewing firm as a result of their monitoring of the peer review process.
10.12.4.2.4 Perform procedures which may consist of but are not limited to the following activities:
10.12.4.2.4.1 Visiting the sponsoring organizations of the approved peer review program;
10.12.4.2.4.2 Reviewing sponsoring organization procedures for administering the program;
10.12.4.2.4.3 Meeting with a sponsoring organization's report acceptance body during consideration of the peer review documents;
10.12.4.2.4.4 Reviewing the sponsoring organization's compliance with its program.
10.12.4.3 Conduct oversight of approved peer review programs to provide reasonable assurance that such programs comply with the minimum standards for performing and reporting on peer reviews. The PROC shall make recommendations to the Board regarding continued approval of peer review programs.
10.12.4.4 The Board shall establish procedures and take all action necessary to ensure that the above materials remain privileged as to any third parties.
10.12.5 Submission of peer review documents
10.12.5.1 A firm is required to submit a copy of the results of its most recently accepted peer review to the Board, which includes the following documents:
10.12.5.1.1 Peer review report which has been accepted by the sponsoring organization.
10.12.5.1.2 The firm's letter of response accepted by the sponsoring organization, if applicable.
10.12.5.1.3 The acceptance letter from the sponsoring organization
10.12.5.1.4 Any letters accepting the documents signed by the firm with the understanding that the firm agrees to take any actions required by the sponsoring organization, if applicable; and
10.12.5.1.5 Letter signed by the sponsoring organization notifying the firm that required actions have been appropriately completed, if applicable.
10.12.5.2 Firms whose peer reviews are scheduled on or after July 1, 2017 are required to submit a copy of the peer review documents in subsections 10.12.5.1.1 through 10.12.5.1.3 to the Board within 30 days of the sponsoring organization's acceptance. The firm shall submit the documents in subsection 10.12.5.1.4 to the Board within 30 days from the date the letter is signed by the firm. The firm shall submit the documents in subsection 10.12.5.1.5 to the Board within 30 days of the date of the letter.

Firms must satisfy this document submission requirement by allowing the sponsoring organization to provide the Board access to the documents via a secure website such as the AICPA Facilitated State Board Access.

24 Del. Admin. Code § 100-10.0

5 DE Reg. 2090 (05/01/02)
9 DE Reg. 1983 (06/01/06)
14 DE Reg. 55 (07/01/10)
19 DE Reg. 658 (1/1/2016)
20 DE Reg. 820 (4/1/2017)
21 DE Reg. 53 (7/1/2017)
25 DE Reg. 871 (3/1/2022)
27 DE Reg. 978 (6/1/2024) (Final)