The licensing requirements for certified public accountants fall under the jurisdiction of the Board of Accountancy in the state where a CPA practices. Only the state-regulating agency that issues a CPA’s license can take disciplinary action affecting the individual’s license to practice. A CPA can lose his license if he is convicted of a crime or faces a formal complaint of ethics violation, gross negligence or fraud.
State Board of Accountancy
Each state’s Board of Accountancy sets the standards for becoming a CPA. While specific state licensure requirements vary, generally, you must complete a four-year degree in an accounting program at an accredited college or university, pass the Uniform CPA exam and get professional work experience in public accounting. Once CPAs become licensed, each state’s regulatory agency regulates conduct according to the rules and statutes that state establishes and mandates CPAs to follow. Evidence to the contrary can lead to investigation by the state Board of Accountancy.
AICPA Bylaws Guide Ethical Behavior
Licensed CPAs can join the American Institute of Certified Public Accountants -- a national, professional organization that provides its members with resources and leadership. Although membership in the AICPA is not mandatory, members who violate the organization’s Code of Professional Conduct may face disciplinary action and have their membership rights suspended or revoked. A member who is suspended for a time may not identify herself as a member of the AICPA, hold an AICPA office or committee position, or vote. In cases where the allegations are not serious enough to warrant expulsion or suspension, a member may be admonished or required to complete a specified number of hours of continuing education courses in a particular area.
Role of State CPA Societies
The bylaws of state and district CPA societies allow members to participate in a Joint Ethics Enforcement Program. Consequently, these societies have the right to investigate allegations of accounting malpractice or misconduct that come to their attention. Based on the outcome of an investigation, they can take disciplinary action as it relates to a CPA’s membership, but not his licensing. Although state CPA societies are not chapters of the AICPA, members who have their license to practice revoked or suspended by the state may also have their state professional and AICPA memberships revoked or suspended.
Offenses That Lead to License Loss
Violating standard accounting practices is a serious offense, and a CPA who is found guilty of professional malpractice or an ethics violation by the state Board of Accountancy risks losing his license to practice. A CPA can lose his license if he fails to file an income tax return, files a fraudulent return or is convicted of a felony offense that is punishable by at least one year in prison. CPAs employed by federal government agencies can find themselves facing disciplinary actions imposed by the Securities and Exchange Commission and other government agencies. Federal law gives these agencies the right to discipline CPAs who practice for them.
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