CPA Mobility Becomes Law in California

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By Anne Rosivach

Certified public accountants from outside California will now be able to serve clients in the state without obtaining a license or paying a fee to the California Board of Accountancy (CBA) under a new law signed on September 20 by Governor Jerry Brown. Changes in the law governing the accounting profession will bring California into conformance with CPA mobility legislation in forty-eight other states and the District of Columbia. It takes effect on July 1, 2013.

Under current law, CPAs from other states need permission from the CBA to practice in the state. Mobility laws already in place in other states have allowed California CPAs to provide most services to their clients without registering with the appropriate board of accountancy.

"The change in the law makes the playing field even for California CPAs and eliminates the possibility of retaliatory action by other states that could reduce opportunities outside our state for California CPAs", said Johanna Sweaney Salt, chair of the 40,000-member California Society of CPAs (CalCPA).

The new law protects consumers. Out-of-state CPAs practicing in California will be subject to the jurisdiction of the CBA. Out-of-state CPA firms still must register with the CBA before they may audit firms based in California. Such firms also will need to register with the CBA to provide compilations and reviews of entities headquartered in California.

Consumers will be able to access licensing information for out-of-state CPAs through the CBA.

The movement to CPA mobility gained momentum in 1997 when the AICPA and National Association of State Boards of Accountancy (NASBA) amended the Uniform Accountancy Act (UAA) which has been used as the basis for most state statutes, including the new California law, that allow interstate mobility. The amendment to the UAA states that a CPA with a valid license from a state with CPA licensing criteria "substantially equivalent" to those outlined in the UAA could practice in another state without obtaining another license. Substantial equivalency in licensure and certification criteria outlined in the UAA is understood to mean 150 hours of education, a passing grade on the CPA exam, and at least one year of experience. 

Following the change to the UAA, most states adopted CPA mobility provisions relatively quickly, but as in California, legislation in New York and Massachusetts was stalled in part because these states first needed to change their licensing requirements. The governor of New York signed that state's legislation in November 2011; Massachusetts approved a mobility statute in July 2011. 

"This legislation has been a long-term goal of CalCPA", noted Salt. "Nowadays even relatively small businesses may have offices or representatives in other states, let alone in other nations. With passage of this law, California CPAs will be better able to serve clients with multistate locations."

Hawaii is the only state that has not passed legislation that provides similar privileges to out-of-state CPAs.

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