Apoplexy Non-California CPAs

Apoplexy Non-California CPAs

Apoplexy Non-California CPAs discusses one of the WORST nightmares that a CPA that is not licensed in California but is practicing in California.

IMPORTANT UPDATE – I spoke to the California Board of Accountancy [“CBA”] Enforcement Unit this morning, and the answer is not grey, it is ABSOLUTE. If a CPA is in public practice and living or working in California, and that does include TAX ONLY, no attest, completing the application process and becoming a licensed CPA in California is MANDATORY, ABSOLUTELY CLEAR. Permit me to add that we are not an official anything, and anyone with the issue needs to do their own research and contact CBA if there are questions.

I was up last night at 1 AM trying to get a colleague to stop freaking out. He happens to be an Oregon CPA that relocated to LA.Apoplexy Non-California CPAs One of his friends told him that if he was living and working in California, that he was required to obtain a California CPA license in order to be able to

  • Practice in public accounting in California
  • Engage in non-attest tax practice and 
  • refer to himself as a CPA in California
I spent two hours digging around in the licensing requirements and couldn’t find a clear answer. So I wrote a request for written advice to the California Board of Accountancy – Compliance, and Enforcement Unit to find out. This is the email I sent to the CBA Enforcement Unit:
I have spent close to two hours attempting to find the answer to a question that should not be over complex, but I must be missing something. The facts are as follows:
  • One of our staff meets the three “E’s and is fully licensed as an Oregon CPA.
  • The individual meets the 150-hour education requirements and the experience requirements for an “A” license.
  • The individual has relocated and is currently living in Los Angeles.
  • The individual is employed by a licensed CPA firm.
Our questions are:
  • Is the individual required to apply for and obtain a California CPA License or may they continue to practice with the Oregon license?
    • Sub-question 1 – if the individual in sole engaged in tax practice, and perform no attest services of any kind does that change the answer?
    • Sub-question 2 – if the individual performs compilations only does that change the answer? same question for reviews and examination?
  • Does the answer change if the individual becomes an owner in a CPA firm entity?
  • Any restriction on having the CPA designation on business cards or a website?
Thank you for your attention to this matter.
Apoplexy Non-California CPAs
This is the language that gave the CPA a shit hemorrhage.

If your principal place of business is located outside California and you hold a valid and current license, certificate, or permit to practice public accountancy from another state, you may qualify to practice public accountancy in California under a practice privilege provided one of the following conditions is met: • You have continually practiced public accountancy as a CPA under a valid license issued by any state for at least four of the last 10 years. • You hold a valid license, certificate, or permit to practice public accountancy from a state determined by the CBA to be substantially equivalent to the licensure qualifications in California under BPC section 5093. • You possess education, examination, and experience qualifications which have been determined by the CBA to be substantially equivalent to the licensure qualifications in California. The CBA will accept individual qualification evaluations of substantial equivalency completed by the National Association of State Boards of Accountancy’s (NASBA) CredentialNet, as outlined in Section 5.5 of the CBA practice privilege regulations. Information regarding CredentialNet can be found on NASBA’s website at www.nasba.org. Those who qualify under these provisions are entitled to use the title “certified public accountant” or the abbreviation “C.P.A.” when practicing in California. – Source: Page 5 of this http://www.dca.ca.gov/cba/licensees/pphandbook.pdf .

This is the provision that is troubling and the cause of Apoplexy Non-California CPAs

ARTICLE 3. Application of Chapter [5050 – 5058.4]

Except as provided in Sections 5052 and 5053, a person shall be deemed to be engaged in the practice of public accountancy within the meaning and intent of this chapter if he or she does any of the following:
(a) Holds himself or herself out to the public in any manner as one skilled in the knowledge, science, and practice of accounting, and as qualified and ready to render professional service therein as a public accountant for compensation.
(b) Maintains an office for the transaction of business as a public accountant.
(c) Offers to prospective clients to perform for compensation, or who does perform on behalf of clients for compensation, professional services that involve or require an audit, examination, verification, investigation, certification, presentation, or review of financial transactions and accounting records.
(d) Prepares or certifies for clients reports on audits or examinations of books or records of account, balance sheets, and other financial, accounting and related schedules, exhibits, statements, or reports that are to be used for publication, for the purpose of obtaining credit, for filing with a court of law or with any governmental agency, or for any other purpose.
(e) In general or as an incident to that work, renders professional services to clients for compensation in any or all matters relating to accounting procedure and to the recording, presentation, or certification of financial information or data.
(f) Keeps books, makes trial balances, or prepares statements, makes audits, or prepares reports, all as a part of bookkeeping operations for clients.
(g) Prepares or signs, as the tax preparer, tax returns for clients.
(h) Prepares personal financial or investment plans or provides to clients products or services of others in implementation of personal financial or investment plans.
(i) Provides management consulting services to clients.
The activities set forth in subdivisions (f) to (i), inclusive, are “public accountancy” only when performed by a certified public accountant or public accountant, as defined in this chapter.
A person is not engaged in the practice of public accountancy if the only services he or she engages in are those defined by subdivisions (f) to (i), inclusive, and he or she does not hold himself or herself out, solicit, or advertise for clients using the certified public accountant or public accountant designation. A person is not holding himself or herself out, soliciting, or advertising for clients within the meaning of this section solely by reason of displaying a CPA or PA certificate in his or her office or identifying himself or herself as a CPA or PA on other than signs, advertisements, letterhead, business cards, publications directed to clients or potential clients, or financial or tax documents of a client.

  ( Article 3 heading repealed and added by Stats. 1959, Ch. 310. )

Apoplexy Non-California CPAs

You can learn more about the regulation of all types of tax professionals here.

Author: abizcannabis

Managing Director & CEO of integrated transactional financial advisory, tax, and technology consulting firm - aBIZinaBOX Inc New York, Chicago, and OaklandCPA.CITP.CISM.CGEIT.CGMAExpertise with: Alt. Investments/Private Equity, Real Estate, Professional Services, CA Cannabis, Tech Start-Ups and Distressed Assets/DebtTechnology Certifications including:Advanced & High Complexity Cloud Integrator AICPA PCPS, CAQ,, IMTA, CITP ISACA CGEIT, CISMState CPA Societies in California, Florida, Illinois, New York and TexasExpertise with Regulatory Compliance - US - HIPAA, FINRA, SEC Rule 17(a)(3)/(4), eDiscovery, FINCEN - EU- EBA, ESMA, EIOPA UK - BoE, PRA, FCA