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Certified Public Accountant



Most states require attendance for a minimum number of hours annually (often 40 hours annually or 80 hours biannually) for appropriate continuing professional education (CPE) to maintain a CPA license.

Two-tier states do not usually require CPE to maintain a CPA certificate. However, all members of the American Institute of Certified Public Accountants must undertake CPE as a condition of AICPA membership.

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Inter-state practice

An accountant is required to meet the legal requirements of any state in which he wants to practice. Also, the term "practice of public accounting" and similar terms are given definitions that vary from state to state. The practice of public accounting under state law often includes the signing of audit reports and the performance of other services, such as tax or management consulting, while holding oneself out as a CPA.

Most states will grant CPA status under reciprocity to a CPA licensed in another state. CPAs from states with less stringent educational requirements may not be able to benefit from these provisions. This does not affect those CPAs who do not plan to offer services directly to the public. Moreover, most states would grant the temporary practising rights to a CPA licensed in another state.

Practice Mobility

In recent years, practice mobility for CPAs has become a major issue of concern. Practice mobility for CPAs is the ability of a licensee to gain a practice privilege outside of their home state without getting an additional license in another state where they will be serving a client.

Because the electronic age makes conducting business across state borders an everyday occurrence, there is a critical need for states to adopt a uniform mobility system that will allow licensed CPAs to provide services across state lines without unnecessary burdens that do not protect the public interest.

Currently, each state has its own rules, regulations and requirements to allow out-of-state CPAs to provide services in that state, resulting in a patchwork system that is inefficient and increasingly difficult to navigate.

The American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA) have analyzed the current system for gaining practice privileges across state lines and have concluded it simply does not work.

Compliance and enforcement of the existing system is almost impossible, with multiple, cumbersome processes and disparities in requirements and fees. Business realities, including an increase in interstate commerce and virtual technologies require a uniform system that allows fluid practice across state lines.

Implementation of a uniform provision would allow consumers to receive timely services from the CPA best suited to the job, regardless of location, without the hindrances of unnecessary filings, forms and increased costs that do not protect the public interest.

Businesses today are often located in multiple states and have compliance responsibilities in multiple jurisdictions and a uniform process will give CPAs the flexibility to better serve these clients.

Uniform adoption of the substantial equivalency provision included in the Uniform Accountancy Act (the model bill for CPA regulation written and endorsed jointly by AICPA and NASBA) will create a system similar to the nation’s driver license that will provide CPAs with mobility while retaining and strengthening state boards’ ability to protect the public interest.

Prior to 2007, four states (Ohio, Missouri, Virginia and Wisconsin) had practice mobility laws in place for CPAs. In 2007, seven more states (Tennessee, Texas, Illinois, Indiana, Maine, Rhode Island and Louisiana) enacted new practice mobility laws for CPAs. As many as twenty states are expected to consider this type of legislation in 2008.

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AICPA membership

The CPA designation is granted by individual state boards, not the American Institute of Certified Public Accountants (AICPA). Membership in the AICPA is not obligatory for CPAs, although many CPAs do join. To become a full member of AICPA, the applicant must hold a valid CPA certificate or license from at least one of the fifty-five U.S. state/territory boards of accountancy; some additional requirements apply.

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State CPA association membership

CPAs may also choose to become members of their local state association or society (also optional). Benefits of membership in a state CPA association range from deep discounts on seminars that qualify for continuing education credits to protecting the public and profession's interests by tracking and lobbying legislative issues that affect local state tax and financial planning issues.

CPAs who maintain state CPA society memberships are required to follow a society professional code of conduct (in addition to any code enforced by the state regulatory authority), further reassuring clients that the CPA is an ethical business professional conducting a legitimate business who can be trusted to handle confidential personal and business financial matters. State CPA associations also serve the community by providing information and resources about the CPA profession and welcome inquiries from students, business professionals and the public-at-large.

CPAs are not normally restricted to membership in the state CPA society in which they reside or hold a license or certificate. Many CPAs who live near state borders or who hold CPA status in more than one state may join more than one state CPA society.

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International context

Many persons from outside the United States obtain the U.S. CPA designation through sitting for the Uniform CPA Exam or International Qualification Examination (IQEX). Due to the size of the U.S. accounting profession and the importance of U.S. accounting rules, many overseas accountants wish to obtain the U.S. CPA designation in addition to, or as an alternative to, a local qualification.

The designation Certified Public Accountant also exists as a public accounting designation in many overseas countries, unrelated to the U.S. CPA designation. These countries include:

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Notes

  1. ^ For example, a Texas statute provides: "A person may not assume or use the title or designation 'certified public accountant,' the abbreviation 'CPA,' or any other title, designation, word, letter, abbreviation, sign, card, or device tending to indicate that the person is a certified public accountant unless the person holds a certificate under this chapter." Tex. Occup. Code sec. 901.451(a).
  2. ^ Flesher, D.L., Previts, G.J. & Flesher, T.K.,Profiling the New Industrial Professionals: The First CPAs of 1896-97 (Business & Economic History, volume 25, 1996)[1]
  3. ^ See generally Uniform CPA Examination: Examination Content Specifications, American Inst. of Certified Public Accountants, p. 11-12 (orig. issued June 14, 2002; references updated Oct. 19, 2005) at [2]

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See also

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External links




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