Regulation of Accountants – Michigan

Pursuant to MCLS § 339.722, the department shall issue licenses, registrations, and certificates as a certified public accountant.  The department shall issue a license to engage in the practice of public accounting in this state only to an individual who holds a certificate as a certified public accountant and who has furnished evidence satisfactory to the board of compliance with the requirements of this article and the rules promulgated under the article.

MCLS § 339.723 provides that each individual having complied with the requirements described in section 720(1)(b) shall be known as a certified public accountant and any other  person shall not use that title or the abbreviation “CPA” or any other word, words, letters, or figures to indicate that the person using them is a certified public accountant unless the use is specifically approved by the board.  Use of the terms “certified accountant”, “chartered accountant”, “public accountant”, and “registered accountant” and the abbreviations “C.A.”, “P.A.”, and “R.A.” is specifically prohibited as being prima facie misleading to the public. Except as provided in section 724, a person shall not engage in the practice of public accounting either in the person’s own name, under an assumed name, or as a member of a firm or as an employee, unless the person holds a Michigan license as a certified public accountant issued under this article or is practicing public accounting in this state pursuant to section 727a.

Unless use of a term is specifically approved by the board, the display or uttering by a person of a card, sign, advertisement, directory listing, or other printed, engraved, or written instrument or device bearing a person’s name in conjunction with a title described in subsection (1) shall be prima facie evidence that the person whose name is so displayed caused or procured the display or uttering of the card, sign, advertisement, directory listing, or other printed, engraved, or written instrument or device.  Evidence of the commission of a single act prohibited by this section is sufficient to justify an injunction or a conviction without evidence of a general course of conduct.  Each licensed firm may use the designation “certified public accountants” in connection with the firm name, except that a licensed firm having only 1 member may use only the designation “certified public accountant”.  An unlicensed firm shall not use the designation “certified public accountants”, “certified accountants”, “chartered accountants”, “public accountants”, or “registered accountants” or the abbreviation “C.P.A.”, “CPA”, “CPAs”, “C.A.”, “P.A.”, or “R.A.” in connection with the firm name unless the firm is licensed under the laws of another licensing jurisdiction and is permitted to practice in this state without obtaining a license as described in section 728.

A person that violates this section or a rule or order promulgated or issued under or related to this section is liable for an administrative fine payable to the department of not more than $25,000.00 per violation.  The department may conduct an investigation and proceed under article 5 to enforce this section.

Pursuant to MCLS § 339.725, the department shall issue a certificate as a certified public accountant to an individual who meets all of the following requirements:

  • Is of good moral character.
  • Has complied with the education requirements of subsection (2).
  • Has passed an examination meeting the requirements of subsection (3).
  • Has complied with the experience requirements of subsection (4).
  • Has completed at least 150 semester hours of college education, including a baccalaureate degree or higher degree with a concentration in accounting, at an educational institution approved by the board.

An individual who has completed a curriculum required for a baccalaureate degree with a concentration in accounting at an educational institution approved by the board may sit for the examination required under subsection (3).  An applicant for a certificate as a certified public accountant shall pass an examination in accounting, auditing, and other related subjects, acceptable to the department and the board, that is given reciprocal status in the plurality of states as compared to other examinations.

An applicant for a certificate as a certified public accountant shall have 1 year of qualifying experience under the direction and supervision of a licensed certified public accountant of this or another state in either of the following:

The practice of public accounting with experience obtained in 1 financial audit and in all of the following areas that may be performed under the direction and supervision of a licensed certified public accountant while the applicant was meeting the education requirements of subsection (2):

  • The application of a variety of auditing procedures and techniques to the usual and customary financial transactions recorded in accounting records.
  • The preparation of working papers covering the examination of the accounts usually found in accounting records for audit, review, and compilation.
  • The participation in the planning of the program of work including the selection of the procedures to be followed for audit, review, and compilation.
  • The participation in the preparation of reports, including written explanations and comments on the findings of the examinations and on the content of the accounting records.
  • The participation in the preparation and analysis of financial statements together with explanations and notes.

The practice of public accounting with a governmental agency involving either of the following:

  • The auditing of the books and accounts or financial activities of persons engaged in 3 or more distinct lines of commercial or industrial business in accordance with generally accepted auditing standards or generally accepted government auditing standards.
  • The auditing of the books and accounts of financial activities of 3 or more distinct governmental agencies or independent organizational units other than an employer of the applicant in accordance with generally accepted auditing standards or generally accepted government auditing standards, and in which the results of the auditing are reported to a third party.

In complying with the requirement of subsection (4) that an applicant shall have performed 1 financial audit, an applicant may submit an audit performed under the direction and supervision of a licensed certified public accountant who is not the applicant’s employer or an audit performed while the applicant was meeting the educational requirements of subsection (2).

MCLS § 339.727 provides that after obtaining a certificate as a certified public accountant under section 725 or 726, an individual shall do one of the following:

  • If the individual only seeks to use a title authorized by this article, the individual shall apply for registration under this article.
  • If the individual seeks to use a title authorized by this article and to engage in the practice of public accounting, the individual shall apply for licensure under this article.  A nonresident member of a firm who has authority for the firm’s practice of public accounting in this state is considered to be engaged in the practice of public accountancy in this state.

MCLS § 339.734 provides that a holder of a certificate, registration, or license as a certified public accountant or an individual exercising the practice privilege granted under section 727a and the firm employing that individual is subject to the penalties of section 602 for 1 or more of the following:

  • Fraud or deceit in obtaining a certificate or registration as a certified public accountant, a license to practice public accounting, or a practice privilege under this article.
  • Dishonesty, fraud, or negligence in the practice of public accounting.
  • Violation of a rule of professional conduct promulgated under this article.
  • Conviction of a felony under the laws of this or another state or the United States or conviction of a crime, an element of which is dishonesty, fraud, or negligence, under the laws of this or another state or of the United States, including, but not limited to, the failure to file a personal federal, state, or local income tax return.
  • Cancellation, revocation, suspension, or refusal to renew authority to practice as a certified public accountant by another state for a cause other than failure to pay a licensure or other required fee in that state.
  • Suspension or revocation for cause of the right to engage in the practice of public accounting before a state or federal agency.
  • Conduct discreditable to the public accounting profession.
  • Determination of mental incompetency by a court of law.
  • A violation of professional standards regarding the issuance of reports on financial statements; 1 or more kinds of management advisory, financial advisory, or consulting services; the preparation of tax returns; or the furnishing of advice on tax matters.

Notwithstanding section 602(e), a person that violates this article or a rule or order promulgated or issued under or related to this article is liable for an administrative fine payable to the department of not more than $25,000.00 per violation.


Inside Regulation of Accountants – Michigan