Definitions of Terms Employed in Registration and Reporting Forms

 

The following terms used in the Forms have specific definitions that the Firm must apply in completing the Forms.  The terms are among the terms defined in PCAOB Rule 1001 and are organized and labeled below according to their paragraph numbering in that rule:

 

(a)(ii)   Accountant

 

            The term "accountant" means a natural person –

 

(1)       who is a certified public accountant, or

 

(2)       who holds –

 

(i)         a college, university, or higher professional degree in accounting, or

 

(ii)        a license or certification authorizing him or her to engage in the business of auditing or accounting, or

 

(3)       who –

 

(i)         holds a college, university, or higher professional degree in a field, other than accounting, and

 

          (ii)        participates in audits;

 

provided, however, that the term "accountant" does not include a person engaged only in clerical or ministerial tasks.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

(a)(iii)  Act

 

            The term "Act" means the Sarbanes-Oxley Act of 2002, as amended.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003); and SEC Release No. 34-65162, File No. PCAOB-2011-02 (August 18, 2011)]

 

(a)(v)   Audit

 

            The term "audit" means an examination of the financial statements, reports, documents, procedures, controls, or notices of any issuer, broker, or dealer by an independent public accounting firm in accordance with the rules of the Board or the Commission, for the purpose of expressing an opinion on the financial statements or providing an audit report.

 

(a)(vi)  Audit Report

 

            The term "audit report" means a document, report, notice, or other record –

           

(1)       prepared following an audit performed for purposes of compliance by an issuer, broker, or dealer with the requirements of the securities laws; and

 

(2)       in which a public accounting firm either –

 

(i)         sets forth the opinion of that firm regarding a financial statement, report, notice, or other document, procedures, or controls; or

 

(ii)        asserts that no such opinion can be expressed.

 

(a)(vii) Audit Services

 

(1)       With respect to issuers, the term “audit services” means professional services rendered for the audit of an issuer's annual financial statements, and (if applicable) for the reviews of an issuer's financial statements included in the issuer's quarterly reports or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years;

 

(2)       With respect to brokers and dealers, the term “audit services” means professional services rendered for the audit of a broker’s or dealer’s annual financial statements, supporting schedules, supplemental reports, and for the report on either a broker’s or dealer’s compliance report or exemption report, as described in Rule 17a-5(g) under the Exchange Act.

 

(a)(xii) Auditor

 

            The term "auditor" means both public accounting firms registered with the Public Company Accounting Oversight Board and associated persons thereof.

 

[Effective pursuant to SEC Release No. 34-50331, File No. PCAOB-2004-06 (September 8, 2004)]

 

(b)(i)   Board

 

            The term "Board" means the Public Company Accounting Oversight Board.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

 (b)(iii)   Broker

 

            The term "broker" means a broker (as defined in Section 3(a)(4) of the Exchange Act), that is required to file a balance sheet, income statement, or other financial statement under Section 17(e)(1)(A) of that Act, where such balance sheet, income statement, or financial statement is required to be certified by a registered public accounting firm.

 

[Effective pursuant to SEC Release No. 34-65162, File No. PCAOB-2011-02 (August 18, 2011)]

 

 (c)(i)   Commission

 

             The term "Commission" means the Securities and Exchange Commission.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

 (d)(iii)   Dealer

 

             The term "dealer" means a dealer (as defined in Section 3(a)(5) of the Exchange Act), that is required to file a balance sheet, income statement, or other financial statement under Section 17(e)(1)(A) of that Act, where such balance sheet, income statement, or financial statement is required to be certified by a registered public accounting firm.

 

[Effective pursuant to SEC Release No. 34-65162, File No. PCAOB-2011-02 (August 18, 2011)]

 

 (f)(i)    Foreign Public Accounting Firm

 

             The term "foreign public accounting firm" means a public accounting firm that is organized and operates under the laws of a non-U.S. jurisdiction, government or political subdivision thereof.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

  (f)(ii)    Foreign Registered Public Accounting Firm

 

             The term "foreign registered public accounting firm" means a foreign public accounting firm that is a registered public accounting firm.

 

[Effective pursuant to SEC Release No. 34-50291, File No. PCAOB-2004-04 (August 30, 2004)]

 (i)(iii)  Issuer

 

            The term "issuer" means an issuer (as defined in Section 3 of the Exchange Act), the securities of which are registered under Section 12 of that Act, or that is required to file reports under Section 15(d) of that Act, or that files or has filed a registration statement that has not yet become effective under the Securities Act of 1933, and that it has not withdrawn.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

 (n)(ii)  Non-Audit Services

 

  The term "non-audit services" means all services other than audit services, other accounting services, and tax services.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003); and SEC Release No. 34-60497, File No. PCAOB-2008-04 (August 13, 2009)]

 

 (o)(i)   Other Accounting Services

 

   The term "other accounting services" means assurance and related services that are reasonably related to the performance of the audit or review of the client's financial statements, other than audit services.

 

 (o)(ii)   Other Accounting Firm

 

   The term "other accounting firm" means (i) a registered public accounting firm other than the Firm; or (ii) any other person or entity that opines on the compliance of any entity's financial statements with an applicable financial reporting framework.

 

 (p)(i)   Person Associated With a Public Accounting Firm (and Related Terms)

 

            The terms "person associated with a public accounting firm" (or with a "registered public accounting firm" or "applicant") and "associated person of a public accounting firm" (or of a "registered public accounting firm" or "applicant") mean any individual proprietor, partner, shareholder, principal, accountant, or professional employee of a public accounting firm, or any independent contractor or entiy that, in connection with the preparation or issuance of any audit report –

 

(1)       shares in the profits of, or receives compensation in any other form from, that firm; or

 

(2)       participates as agent or otherwise on behalf of such accounting firm in any activity of that firm;

 

provided, however, that these terms do not include a person engaged only in clerical or ministerial tasks, or, for purposes of completing a registration application on Form 1, Part IX of an annual report on Form 2, or Part IV of a Form 4 filed to succed to the registration status of a predecessor, these terms do not include a person whom the public accounting firm reasonably believes is a person primarily associated with another registered public accounting firm.

 

Note:  Section 2(a)(9)(C) of the Act provides that, for purposes of, among other things, Section 105 of the Act, and the Board's rules thereunder, the terms defined in Rule 1001(p)(i) shall include any person associated, seeking to become associated, or formerly associated with a public accounting firm, except that:

 

(1)       the authority to conduct an investigation of such person under Section 105(b) of the Act shall apply only with respect to any act or practice, or omission to act, by the person while such person was associated or seeking to become associated with a registered public accounting firm; and

 

(2)       the authority to commence a disciplinary proceeding under Section 105(c)(1) of the Act, or impose sanctions against such person under Section 105(c)(4) of the Act, shall apply only with respect to:

 

(i)         conduct occurring while such person was associated or seeking to become associated with a registered public accounting firm; or

 

(ii)         non-cooperation, as described in Section 105(b)(3) of the Act, with respect to a demand in a Board investigation for testimony, documents, or other information relating to a period when such person was associated or seeking to become associated with a registered public accounting firm.

 

(p)(ii)   Play a Substantial Role in the Preparation or Furnishing of an Audit Report

 

  The phrase "play a substantial role in the preparation or furnishing of an audit report" means –

 

(1)       to perform material services that a public accounting firm uses or relies on in issuing all or part of its audit report, or

 

(2)       to perform the majority of the audit procedures with respect to a subsidiary or component of any issuer, broker, or dealer, the assets or revenues of which constitute 20% or more of the consolidated assets or revenues of such issuer, broker, or dealer necessary for the principal auditor to issue an audit report.

 

Note 1:  For purposes of paragraph (1) of this definition, the term "material services" means services, for which the engagement hours or fees constitute 20% or more of the total engagement hours or fees, respectively, provided by the principal auditor in connection with the issuance of all or part of its audit report.  The term does not include non-audit services provided to non-audit clients.

 

Note 2:  For purposes of paragraph (2) of this definition, the phrase "subsidiary or component" is meant to include any subsidiary, division, branch, office or other component of an issuer, broker, or dealer, regardless of its form of organization and/or control relationship with the issuer, broker or dealer.

 

Note 3:  For purposes of determining "20% or more of the consolidated assets or revenues" under paragraph (2) of this Rule, this determination should be made at the beginning of the issuer's, broker's, or dealer's fiscal year using prior year information and should be made only once during the issuer's, broker's, or dealer's fiscal year.

 

(p)(iii)  Public Accounting Firm

 

            The term "public accounting firm" means a proprietorship, partnership, incorporated association, corporation, limited liability company, limited liability partnership, or other legal entity that is engaged in the practice of public accounting or preparing or issuing audit reports.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

 (r)(i)    Registered Public Accounting Firm

 

            The term "registered public accounting firm" means a public accounting firm registered with the Board.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

(r)(ii)    Rules or Rules of the Board

 

            The terms "Rules" or "Rules of the Board" mean the bylaws and rules of the Board (as submitted to and approved, modified, or amended by the Commission in accordance with Section 107 of the Act) and those stated policies, practices, and interpretations of the Board that the Commission, by rule, may deem to be rules of the Board, as necessary or appropriate in the public interest or for the protection of investors.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

 (s)(iii) State

 

  The term "State" means any state of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, or any other territory or possession of the United States.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]

 

 (t)(i)    Tax Services

 

  The term "tax services" means professional services rendered for tax compliance, tax advice, and tax planning.

 

[Effective pursuant to SEC Release No. 34-48180, File No. PCAOB-2003-03 (July 16, 2003)]