(Note – your version of November is misspelled)

Eighty-five (85) candidates sat for the November 2003 Uniform CPA Examination. Twenty-eight (28) were initial candidates and fifty-seven (57) were re-examination candidates. Sixty-three candidates sat for all four sections. Eleven (11) passed the exam; three (3) candidates passed all four sections. Nine (9) candidates conditioned. Five (5) previously conditioned candidates improved their status by passing an additional part. Congratulations to Lisa M. Lentz, graduate of Augustana College, Jamie A. Eldeen, graduate of University of South Dakoa and Jackie L. Marshall, graduate of Chadron College for passing all four sections of the exam!

The first section of the FAQs below will deal with the computerization of the Uniform CPA Examination. The second section will deal with questions frequently asked by licensees.

If you have any questions, please do not hesitate to contact the board office. We are here to provide assistance to you. Helping you understand the accountancy laws and rules governing the accounting profession promotes the Board’s mission of public protection!

Yes, in anticipation of the computerization of the CPA Examination, the residency rule has been repealed. Uniform CPA Examination Candidates will be allowed to choose the testing site in which they wish to sit for the CPA Examination.

The educational requirement, which must be met within 100 days after an applicant sits for the examination, is a minimum of 150 semester hours of college education, including graduation from an accredited college or university with a baccalaureate or graduate major in accounting, or the satisfactory completion of a course of study substantially equivalent to an accounting major, as determined by the Board.

Both a major in accounting and a course of study substantially equivalent to an accounting major must include 24 semester hours in accounting at the undergraduate or graduate level from an accredited college or university, including elementary principles of accounting and at least one course in each of the following: intermediate or advanced accounting, auditing, income tax and cost accounting. Additionally, candidates must include at least 24 semester hours of business courses, other than accounting courses at the undergraduate or graduate level.

An individual applying for a CPA certificate must have completed the same educational requirement as is required to sit for the CPA Examination.

Initial and re-exam applications are currently available on the South Dakota State Board of Accountancy website at www.state.sd.us/dol/boards/accountancy.

If you would like to have an application mailed to you, please call the Board office, 605-367-5770, or send an e-mail to sdbdacct.sdbd@midconetwork.com and include your full name, mailing address and telephone number.

No. You may elect to sit for as many or as few parts as you choose. The board recommends signing up and paying only for the number of exam sections you expect to schedule in each testing window.

A testing window consists of two months within every three month quarter of the calendar year. The first testing window is April – June. Testing is available during April and May of this window. Testing will not be conducted in June. The third month of each window will be designated for refreshing the test item bank and grading purposes.

Each examination fee listed below includes a $30 application processing fee. This fee is non-refundable.

SECTION EXAM LENGTH EXAM FEE

You must pass all four sections of the Uniform CPA Examination within 18 (add space) months. All parts must be passed during the 18 month period. Credit will be lost for any exam passed outside the 18 month period.

Each candidate with conditional credits will be allowed a transition period to complete any remaining test sections. The transition shall not exceed a candidate’s completion of the same number of examination opportunities under the computer-based examination that the candidate had remaining to take under the paper-and-pencil examination, or the remaining number of opportunities under the paper-and-pencil examination, multiplied by six months, whichever is first exhausted.

The board recommends filing your application by the 15^th of the month prior to the testing window for which you wish to sit. For example, if you wish to sit in the first testing window which is April-June, you should file your application with the board by March 15^th to ensure your desired testing date. However, you are not limited to this deadline. The board will accept applications throughout the year.

There is no experience requirement to sit for the examination.

You may download the "Proposed Structure & Content Specifications for the Uniform CPA Examination", by visiting www.cpa-exam.org. You may also download the white paper on the new Business Environment and Concepts (BEC) section of the examination which will replace the Business Law and Professional Responsibilities section previously given on the paper-and-pencil exam.

Visit www.cpa-exam.org and participate in the tutorial available. Also, familiarize yourself with the professional literature governing accounting, auditing and tax standards. You may visit www.aicpa.org to find information pertaining to the AICPA Professional Standards. The Financial Accounting Standards Board (FASB) has made their professional literature available at their website www.fasb.org. All sections of the computerized exam except the BEC section require candidates to access professional standards in the research portion of the simulations. Familiarization with accessing of professional standards on line is critical to your successful completion of this segment of the exam section(s). The AICPA offers a one year subscription to the on-line Professional Standards for exam candidates. Please visit their website for information on obtaining a subscription to on-line professional standards for both student members and non-student members.

Once the board has reviewed your application and determined your eligibility to sit for the examination, you will receive a letter from the board. This letter will confirm your eligibility and notify you that you will be receiving a "notice to schedule" (NTS). The board will enter a authorization to test with the National Association of State Boards of Accountancy (NASBA). Once this is received and processed you will be issued a NTS. You can expect to receive your NTS within a week of having your application processed.

Your NTS will be valid for one year. This will be your set period of time to schedule and take the exam section(s) for which you have been issued a NTS. After one year of receiving a NTS for any given section your NTS will expire and you will be required to re-apply.

A candidate may sit for as many parts of the exam as they register for within any given window. Duplicate sections will not be allowed within the same testing window. You may register to sit for the exam during each testing window throughout the calendar year. The board does not recommend registering for more parts than you can reasonably expect to complete within a given window. You will be issued a notice to schedule for each section for which you make application. The notice to schedule expires after one-year. If for some unanticipated reason you are unable to schedule a test for which you have been issued an NTS within the one-year allotted time period, you will be required to re-register and pay for those sections not taken.

Candidates will not be required to pass one section before applying to take another section of the exam.

Information provided to you from the board with your NTS will provide you the information necessary to schedule your testing times. You may also visit the Board’s website at www.state.sd.us/dol/boards/accountancy and click on Licensing Information/Forms. Under Uniform CPA Examination you will find "What to Know Before You Go", which provides information relevant to the testing site, identification requirements for testing, ADA policies and other useful information.

There is one Prometric testing site in South Dakota, located in the Sylvan Learning Center one block west of Louise on 57^th Street in Sioux Falls.

The Board will continue to determine if a candidate qualifies as an ADA candidate.

There will no longer be a uniform grade mailing date. Your responses will be transmitted to the American Institute of Certified Public Accountants (AICPA) for scoring. It is anticipated that grades will be released after the end of each testing window during the first year. After the first year of computerized testing, we anticipate grade release within a two week period of completing an exam section, however grades will continue to be released by the AICPA and they will be responsible for making the final determination on score/grade release dates.

You must first complete the one year experience requirement and the AICPA Professional Ethics for CPAs course. The Ethics Course can be ordered from the AICPA or the South Dakota CPA Society. This is an open book home study course which is graded by the AICPA. You will advise the AICPA that you wish your grade to be sent to the Board office. In the meantime, you should obtain and complete an application for a CPA certificate from the Board office. The initial certificate fee is $50, the fee for subsequent renewal of the certificate is $50. Character reference forms will be sent to three individuals whose names you provide. These references cannot be relatives and you must have known them for at least one year. Once the board has received the results of your ethics examination the character reference and certificate of experience forms your application can be processed.

An individual employed by a licensed firm is required to obtain a certificate within 90 days of completing the experience requirement. There is a $50 additional fee for failing to apply for the certificate within the 90 day period allowed.

An applicant has 3 years from the time of passing the CPA exam to apply for a CPA certificate. If an applicant passes the examination but fails to apply for a certificate after 3 years of meeting the requirements for licensure, the board may require them to apply as an initial candidate to sit for the Uniform CPA Examination.

The experience requirement is one year, and shall include providing any type of service or advice involving the use of accounting, attest, management advisory, financial advisory, tax, or consulting skills. Acceptable experience may be gained through employment in government, industry, academia, or public practice. One year equals 2,000 hours.

Individuals responsible for the performance of attest services, audits, compilations or reviews who sign or authorize someone to sign on behalf of the firm the accountant’s report on the financial statements, must have experience in audit, compilation or review, in any combination, which totals at least 375 hours. The individual’s experience must be earned within the ten year period immediately preceding the latest application for a certificate under the 2002 South Dakota Accountancy Act.

A Certificate of Experience form should be obtained from the Board office. This form should be completed by the applicant and certified by the applicant's supervisor.

Yes, if you accumulate 2,000 hours in less than a 1 year period, you should request and complete a Certificate of Experience form at that time. Once you have met the experience requirement you are required to obtain a certificate within 90 days.

Anyone registering their certificate as active may use the CPA designation. Individuals registering their certificate as inactive must include the caveat (inactive) in the same font as the CPA designation.

A holder of an active CPA certificate must comply with the continuing professional education (CPE) requirement established by the board. The current requirement for active certificate holders is 120 hours in a three year rolling period. Individuals registering inactive are not required to comply with the CPE requirement. Both active and inactive certificates must be renewed annually.

An individual certificate holder whose initial certificate was issued by another state less than three years before the renewal date shall fulfill the following minimum requirements of CPE:

Initial certificate issued less than one year before the renewal date – none

Initial certificate issued at least one year before the renewal date - 20 hours

Initial certificate issued at least two years but less than three years – 40 hours.

A minimum of 20 hours of CPE credits per year must be reported, regardless of the number of hours accumulated within the three year cycle.

No. CPE is figured on a rolling three year cycle. Each June 30th, you must have a total of at least 120 hours when you add the current year just ending and the previous 2 years. Each year, the previous 3rd total drops off. You always count the current year and the previous two years.

If you find you are going to be short hours, please contact the Board office as soon as possible and explain the situation. ARSD 20:75:04:11 allows for extensions to complete CPE hours. A 30 to 90 day extension period may administratively be granted on a one time basis. The board shall review subsequent requests for extensions and may grant them on a case by case basis for good cause. Good cause includes personal emergencies, acts of God, or administrative errors made by the board.

ARSD 20:75:04:02 describes the general qualifying criteria of continuing professional education. It must be a program of formal learning that directly contributes to the professional competence of a licensee in the practice of accountancy. A program that promotes professional competence in the practice of accountancy is defined as one that refers to the process, methods, or principles of accounting or directly relates to the licensee’s employment and is above the level of the licensee’s current knowledge.

Course sponsors should keep attendance for at least four years; provide a course outline and a certificate of completion.

Self study courses must be graded and a completion certificate must be received.

CPE credit is granted based on a 50 minute hour. After the first hour of instruction, a half credit increment may be granted for 25 minutes of course instruction.

It is not necessary to submit substantiating documentation for CPE reported. However, please keep accurate records of what you report to the board. In the event that you are chosen for the board’s annual CPE audit you will then be required to substantiate all CPE reported during your three-year CPE cycle.

If you are a licensee of another state transferring to South Dakota you must contact the Board. Based on licensing information taken from you, the board staff will determine whether the state you hold a license in is substantially equivalent to South Dakota. If the state you are transferring from is not substantially equivalent to South Dakota, your individual qualifications may qualify you for substantial equivalency under South Dakota law.

You will be asked to complete an application provided by the board, and to send a "interstate exchange form" to the board in which your license was issued. Once the board receives the licensing fee and processes the forms, you will be registered to practice accounting in South Dakota. If you are planning to work in public accounting, you must meet the 375 hours of experience requirement for attest work to perform audits, reviews and compilations, the board office will provide a certificate of experience form for these purposes. Individuals working in private industry need only comply with the one-year experience requirement defined in 36-20B-21. If you are not providing accounting services to the public, you may register your certificate/license as inactive. Inactive licensees are not required to comply with the continuing professional education requirement, however, they must use the caveat "inactive" next to their CPA designation.

Non-resident CPA’s licensed in another state, may file notification with the South Dakota State Board. Notification must be filed annually. The fee for filing notification is $50.

No, once you have been issued a South Dakota license it is not a requirement of South Dakota that you remain licensed in the original state of licensure. However, the board cautions individuals to contact the board in which their original license was granted to ensure continued compliance with the regulations in that State.

No. You may sign a waiver on the back of the annual renewal form, which states, you are reporting to another state. The board will verify with the issuing state on an annual basis.

Yes. Although tax and bookkeeping are not regulated under the South Dakota Accountancy Act, the CPA designation is. If you are a CPA, performing or offering to perform any type of accounting services to the public, you must maintain an active CPA license.

If you are performing or offering to perform reviews, audits or compilations (attest functions) to the public, you must do so through a licensed firm. You may obtain a firm permit from the board office or by accessing our website and clicking on licensing forms.

No. However, if you include the word CPA, Accounting or Accountancy in your business name, you will be required to have a firm permit. If you are representing yourself as a CPA firm to the public, you must be licensed, even if you are not offering to perform attest services. The CPA designation is regulated under the Accountancy Act.

If you are performing audits, compilations and/or reviews you are subject to peer review. If you are only preparing compilations without disclosures, you may qualify for an off-site review. If you are required to have a peer review by the AICPA, you may apply to the board for an equivalent review. You will be required to complete a request for an equivalent review and submit it to the South Dakota board along with a fee of $75. Once the review is complete, the firm is required to submit the letter of acceptance, letter of comments, if any, and response to letter of comments within 30 days of issuance or pay a late fee penalty of $50.

If the firm is not subject to a peer review by the AICPA, the firm may apply for a South Dakota review. The fee is $75 and documentation is required to be submitted within 30 days of receipt from the peer reviewer. You may request a list of qualified reviewers in your area from the board office. All firms performing attest must submit to a peer review once every three years. New firms must submit to a peer review after the first year of operating as a South Dakota firm.

• Some level of frustration with the relevance of the current body of GAAP literature to small businesses.
• The belief among some CPAs that lenders don’t appear to be using all of the GAAP information required in financial statements.
• The cost/benefit equation for private companies of certain reporting and disclosures which may have been designed primarily for public companies.
• A trend in recent efforts of the Financial Accounting Standards Board (FASB) towards convergence with International standards and fair value accounting.

Due to the geographical make up of South Dakota, CPA’s licensed in South Dakota primarily provide services to small businesses in rural communities.This information has been provided to encourage you to monitor the activities of the PRIVATE COMPANY FINANCIAL REPORTING TASK FORCE, established by the AICPA and provide feedback to the process by logging on to www.aicpa.org. You may also find it useful to monitor the new Small business Advisory Committee established by FASB by logging on to www.fasb.org.

Bobbi Barnhill

Executive Director