Regulation of Accountants – Minnesota

Pursuant to Minn. Stat. § 326A.03, the certificate of certified public accountant shall be granted to persons of good moral character who meet the education, experience, and examination requirements of this section and rules adopted under it and who apply under section 326A.04.

Good moral character for purposes of this chapter means the propensity to provide professional services in a fair, honest, and trustworthy manner and a lack of a history of dishonest or felonious acts.  The board may refuse to grant a certificate on the ground of failure to satisfy this requirement only if there is a substantial connection between the lack of good moral character of the applicant and the professional responsibilities of a licensee and if the finding by the board of lack of good moral character is supported by clear and convincing evidence.  When an applicant is found to be unqualified for a certificate because of a lack of good moral character, the board shall furnish the applicant a statement containing the findings of the board, a complete record of the evidence upon which the determination was based, and a notice of the applicant’s right of appeal.

Until July 1, 2006, the examination must be administered by the board only to a candidate who:

  • holds a master’s degree with a major in accounting from a college or university that is fully accredited by a recognized accrediting agency listed with the United States Department of Education;
  • holds a baccalaureate degree, with a major in accounting, from a college or university that is fully accredited by a recognized accrediting agency listed with the United States Department of Education or who has in the opinion of the board at least an equivalent education;
  • holds a baccalaureate degree from a college or university that is fully accredited by a recognized accrediting agency listed with the United States Department of Education, or who has in the opinion of the board at least an equivalent education, provided that at least one year of experience of the type specified in subdivision 8 has been completed;
  • provides evidence of having completed two or more years of study with a passing grade average or above from a college, university, technical college, or a Minnesota licensed private school that is fully accredited by a recognized accrediting agency listed with the United States Department of Education, or who has in the opinion of the board at least an equivalent education, provided that at least three years experience of the type specified in subdivision 8 has been completed; or
  • holds a diploma as a graduate of an accredited high school, or who has in the opinion of the board at least an equivalent education, provided that at least five years experience of the type specified in subdivision 8 has been completed.

On or after July 1, 2006, the examination must be administered by the board only to a candidate who has a baccalaureate or higher degree, with a major in accounting or a major in business with accounting emphasis, or an equivalent education, from a college or university that is fully accredited by a recognized accrediting agency listed with the United States Department of Education or an equivalent accrediting association.  Notwithstanding any contrary provision in this section, the board may adopt rules to permit a person under certain circumstances to apply for the examination within 180 days prior to the person’s anticipated completion of the education requirements; and to take all or a part of the examination within 90 days of the anticipated completion of the education requirements.  No credit shall be given for any part of the examination taken before completion of the education requirements in subdivision 3 unless:

  • the education requirements in subdivision 3 and adopted rule requirements are met within 120 days after taking any part of the examination; and
  • documentation of completion of education requirements is received by the board within 150 days of the person taking any part of the examination.

Until July 1, 2006, a person who has passed the examination required by this section and who meets all other requirements for a certificate, including payment of required fees, must be granted a certificate as a certified public accountant, providing that the person has completed the following experience requirements of the type specified in subdivision 8 in addition to any experience already required in subdivision 2:

  • for those whose educational qualifications meet the requirements of subdivision 2, clause (1), the experience requirement is one year;
  • for those whose educational qualifications meet the requirements of subdivision 2, clause (2), the experience requirement is two years;
  • for those whose educational and experience qualifications meet the requirements of subdivision 2, clause (3), the additional required experience is two years;
  • for those whose educational and experience qualifications meet the requirements of subdivision 2, clause (4), the additional required experience is two years; and
  • for those whose educational and experience qualifications meet the requirements of subdivision 2, clause (5), the additional required experience is one year.

On or after July 1, 2006, a person who has passed the examination required in this section must be granted a certificate as a certified public accountant provided:

  • the person certifies to the board that the person has completed at least 150 semester or 225 quarter hours at a college or university that is fully accredited by a recognized accrediting agency listed with the United States Department of Education, or an equivalent accrediting association, and has completed at least one year of experience of the type specified in paragraph (b);
  • the board verifies the certifications; and
  • the person complies with requirements for initial issuance of the certificate as a certified public accountant as prescribed by the board by rule.

An applicant for initial issuance of a certificate under this subdivision shall show that the applicant has had one year of experience.  Acceptable experience includes providing any type of service or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax, or consulting skills, as verified by a licensee and meeting requirements prescribed by the board by rule.  Acceptable experience may be gained through employment in government, industry, academia, or public practice. Experience as an auditor in the Office of the Legislative Auditor or State Auditor, as verified by a licensee, shall be acceptable experience.  The board, in consultation with the University of Minnesota, the Minnesota State Colleges and Universities, private colleges, and private career schools regulated under chapter 141, shall establish criteria to assess equivalent education for purposes of subdivision 3.  Until July 1, 2006, qualifying experience includes public accounting experience:

  • as a staff employee of a certified public accountant, or a firm;
  • as an auditor in the Office of the Legislative Auditor or State Auditor, or as an auditor or examiner with any other agency of government, if the experience, in the opinion of the board, is equally comprehensive and diversified;

Minn. Stat. § 326A.04 provides that the board shall grant or renew certificates to a person of good moral character who makes an application and demonstrates that the person’s qualifications, including where applicable the qualifications prescribed by section 326A.03, are in accordance with this section and rules adopted by the board.  The holder of a certificate issued under this section may only provide attest services in a CPA firm that holds a permit issued under section.

Certificates must be initially issued and renewed for periods of not more than three years but in any event must expire on December 31 in the year prescribed by the board by rule. Applications for certificates must be made in the form, and in the case of applications for renewal between the dates, specified by the board in rule.  The board shall grant or deny an application no later than 90 days after the application is filed in proper form.  If the applicant seeks the opportunity to show that issuance or renewal of a certificate was mistakenly denied, or if the board is unable to determine whether it should be granted or denied, the board may issue to the applicant a provisional certificate that expires 90 days after its issuance, or when the board determines whether or not to issue or renew the certificate for which application was made, whichever occurs first.  Certificate holders who do not provide professional services and do not use the certified public accountant designation in any manner are not required to renew their certificates provided they have notified the board as provided in board rule and comply with the requirements for nonrenewal as specified in board rule.

Applications for renewal of a certificate that are complete and timely filed with the board and are not granted or denied by the board before January 1 are renewed on a provisional basis as of January 1 and for 90 days thereafter, or until the board grants or denies the renewal of the certificate, whichever occurs first, provided the licensee meets the requirements in this chapter and rules adopted by the board.

With regard to an applicant who must obtain a certificate in this state because the applicant does not qualify under the substantial equivalency standard in section 326A.14, subdivision 1, the board shall issue a certificate to a holder of a certificate, license, or permit issued by another state upon a showing that:

  • the applicant passed the examination required for issuance of a certificate in this state;
  • the applicant had four years of experience of the type described in section 326A.03, subdivision 6, paragraph (b), if application is made on or after July 1, 2006, or section 326A.03, subdivision 8, if application is made before July 1, 2006; or the applicant meets equivalent requirements prescribed by the board by rule, after passing the examination upon which the applicant’s certificate was based and within the ten years immediately preceding the application;
  • if the applicant’s certificate, license, or permit was issued more than four years prior to the application for issuance of an initial certificate under this subdivision, that the applicant has fulfilled the requirements of continuing professional education that would have been applicable under subdivision 4; and
  • the applicant has met the qualifications prescribed by the board by rule.

A certificate holder licensed by another state who establishes a principal place of business in this state shall request the issuance of a certificate from the board prior to establishing the principal place of business.  The board shall issue a certificate to the person if the person’s individual certified public accountant qualifications, upon verification, are substantially equivalent to the certified public accountant licensure requirements of this chapter or the person meets equivalent requirements as the board prescribes by rule.  Residents of this state who provide professional services in this state at an office location in this state shall be considered to have their principal place of business in this state.

Each licensee shall participate in a program of learning designed to maintain professional competency.  The program of learning must comply with rules adopted by the board.  The board may by rule create an exception to this requirement for licensees who do not perform or offer to perform for the public one or more kinds of services involving the use of accounting or auditing skills, including issuance of reports on financial statements or of one or more kinds of management advisory, financial advisory or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters.  A licensee granted such an exception by the board must place the word “inactive” adjacent to the CPA title on any business card, letterhead, or any other document or device, with the exception of the licensee’s certificate on which the CPA title appears.  The board shall charge a fee for each application for initial issuance or renewal of a certificate under this section.

An applicant for initial issuance or renewal of a certificate under this section shall list in the application all states in which the applicant has applied for or holds certificates, licenses, or permits, and list any past denial, revocation, or suspension of a certificate, license, or permit.  Each holder of or applicant for a certificate under this section shall notify the board in writing, within 30 days after its occurrence, of any issuance, denial, revocation, or suspension of a certificate, license, or permit by another state.  The board shall issue a certificate to a holder of a generally equivalent foreign country designation, provided that the foreign authority that granted the designation makes similar provision to allow a person who holds a valid certificate issued by this state to obtain the foreign authority’s comparable designation;the foreign designation:

  • was duly issued by a foreign authority that regulates the practice of public accountancy and the foreign designation has not expired or been revoked or suspended;
  • entitles the holder to issue reports upon financial statements; and
  • was issued upon the basis of educational, examination, and experience requirements established by the foreign authority or by law; and

the applicant:

  • received the designation, based on educational and examination standards generally equivalent to those in effect in this state, at the time the foreign designation was granted;
  • has, within the ten years immediately preceding the application, completed an experience requirement that is generally equivalent to the requirement in section 326A.03, subdivision 6, paragraph (b), if application is made on or after July 1, 2006, or section 326A.03, subdivision 8, if application is made before July 1, 2006, in the jurisdiction that granted the foreign designation; completed four years of professional experience in this state; or met equivalent requirements prescribed by the board by rule; and
  • passed a uniform qualifying examination in national standards and an examination on the laws, regulations, and code of ethical conduct in effect in this state as the board prescribes by rule.

An applicant under subdivision 7 shall list in the application all jurisdictions, foreign and domestic, in which the applicant has applied for or holds a designation to practice public accountancy.  Each holder of a certificate issued under subdivision 7 shall notify the board in writing, within 30 days after its occurrence, of any issuance, denial, revocation, or suspension of a designation or commencement of a disciplinary or enforcement action by any jurisdiction.

The board shall by rule require as a condition for renewal of a certificate under this section by any certificate holder who performs compilation services for the public other than through a CPA firm, that the individual undergo, no more frequently than once every three years, a peer review conducted in a manner specified by the board in rule.  The review shall include verification that the individual has met the competency requirements set out in professional standards for the services described in this subdivision as set forth by rule.

The certificate of a person who fails to renew a certificate for more than two years after expiration or the certificate of a person who had not reported required experience to the board by January 1, 2003, and who fails to report the required experience under Minnesota Rules shall be automatically revoked by order of the board.  The orders may be issued by the board without following the procedures of chapter 14, provided the board notifies each affected person by mail at the person’s last known address on file with the board at least three days prior to the issuance of any order.  No notice is required if the last communication sent by the board to a licensee was returned to the board by the United States Postal Service as undeliverable and with no forwarding address.  Certificates revoked by the board may be reinstated, if at all, under section 326A.09.  This subdivision does not apply to certified public accountants who have notified the board, according to requirements prescribed by board rule, that they will not use the CPA designation in any manner and will not provide professional services.

The board shall adopt rules establishing requirements for a professional ethics examination which must be completed before an initial certificate is issued under this section.  Pursuant to Minn. Stat. § 326A.08, if the board, or the complaint committee if authorized by the board, has a reasonable basis to believe that a person or firm has engaged in or is about to engage in a violation of a statute, rule, or order that the board has issued or is empowered to enforce, the board, or the complaint committee if authorized by the board, may proceed as described in this section.  The board may, upon receipt of a complaint or other information suggesting violations of this chapter or of the rules of the board, conduct investigations to determine whether there is reasonable basis to institute proceedings under this section against any person or firm for such violations.  The investigation is not a prerequisite to such proceedings in the event that a determination can be made without investigation.

Minn. Stat. § 326A.09 provides that when necessary to prevent an imminent violation of a statute, rule, or order that the board has issued or is empowered to enforce, the board, or the complaint committee if authorized by the board, may bring an action in the name of the state in the district court in Ramsey county, when necessary to prevent imminent harm to the public, or in any county in which jurisdiction is proper to enjoin the act or practice and to enforce compliance with the statute, rule, or order.  Upon a showing that a person or firm has engaged in or is about to engage in an act or practice constituting a violation of a statute, rule, or order that the board has issued or is empowered to enforce, a permanent or temporary injunction, restraining order, or other appropriate relief shall be granted.

For purposes of injunctive relief under this subdivision, irreparable harm exists when the board shows that a person or firm has engaged in or is about to engage in an act or practice constituting a violation of a statute, rule, or order that the board has issued or is empowered to enforce.  Injunctive relief granted under paragraph (a) does not relieve an enjoined person or firm from criminal prosecution from a competent authority or from action by the board pursuant to subdivisions 4 to 7 with respect to the person’s or firm’s certificate, permit, registration, or practice privileges granted under section 326A.14 or application for examination, certificate, registration, permit, or renewal or notification for practice privileges granted under section 326A.14.

The board, or the complaint committee if authorized by the board, may issue and have served upon a certificate holder, a permit holder, a registration holder, a person with practice privileges granted under section 326A.14, a person who has previously been subject to a disciplinary order by the board, or an unlicensed firm or person an order requiring the person or firm to cease and desist from the act or practice constituting a violation of the statute, rule, or order.  The order must be calculated to give reasonable notice of the rights of the person or firm to request a hearing and must state the reasons for the entry of the order.  The board may, by order, deny, refuse to renew, suspend, temporarily suspend, or revoke the application, or practice privileges, registration or certificate of a person or firm; censure or reprimand the person or firm; prohibit the person or firm from preparing tax returns or reporting on financial statements; limit the scope of practice of any licensee; limit privileges under section 326A.14; refuse to permit a person to sit for examination; or refuse to release the person’s examination grades if the board finds that the order is in the public interest and that, based on a preponderance of the evidence presented, the person or firm:

  • has violated a statute, rule, or order that the board has issued or is empowered to enforce;
  • has engaged in conduct or acts that are fraudulent, deceptive, or dishonest whether or not the conduct or acts relate to performing or offering to perform professional services, providing that the fraudulent, deceptive, or dishonest conduct or acts reflect adversely on the person’s or firm’s ability or fitness to provide professional services;
  • has engaged in conduct or acts that are negligent or otherwise in violation of the standards established by board rule, where the conduct or acts relate to providing professional services, including in the filing or failure to file the licensee’s income tax returns;
  • has been convicted of, has pled guilty or nolo contendere to, or has been sentenced as a result of the commission of a felony or crime, an element of which is dishonesty or fraud; has been shown to have or admitted to having engaged in acts or practices tending to show that the person or firm is incompetent; or has engaged in conduct reflecting adversely on the person’s or firm’s ability or fitness to provide professional services, whether or not a conviction was obtained or a plea was entered or withheld and whether or not dishonesty or fraud was an element of the conduct;
  • employed fraud or deception in obtaining a certificate, permit, registration, practice privileges, renewal, or reinstatement or in passing all or a portion of the examination;
  • has had the person’s or firm’s permit, registration, practice privileges, certificate, right to examine, or other similar authority revoked, suspended, canceled, limited, or not renewed for cause, or has committed unprofessional acts for which the person or firm was otherwise disciplined or sanctioned, including, but not limited to, being ordered to or agreeing to cease and desist from prescribed conduct, in any state or any foreign country;
  • has had the person’s or firm’s right to practice before any federal, state, other government agency, or Public Company Accounting Oversight Board revoked, suspended, canceled, limited, or not renewed for cause, or has committed unprofessional acts for which the person or firm was otherwise disciplined or sanctioned, including, but not limited to, being ordered to or agreeing to cease and desist from prescribed conduct;
  • failed to meet any requirement for the issuance or renewal of the person’s or firm’s certificate, registration or permit, or for practice privileges;
  • with respect to temporary suspension orders, has committed an act, engaged in conduct, or committed practices that may result or may have resulted, in the opinion of the board or the complaint committee if authorized by the board, in an immediate threat to the public;
  • has engaged in any conduct reflecting adversely upon the person’s or firm’s fitness to perform services while a licensee, individual granted privileges under section 326A.14, or a person registered under section 326A.06, paragraph (b); or
  • has, prior to a voluntary surrender of a certificate or permit to the board, engaged in conduct which at any time resulted in the discipline or sanction described in clause (6) or (7).

In lieu of or in addition to any remedy provided in paragraph (a), the board, or the complaint committee if authorized by the board, may require, as a condition of continued possession of a certificate, a registration, or practice privileges, termination of suspension, reinstatement of permit, registration of a person or firm or of practice privileges under section 326A.14, a certificate, an examination, or release of examination grades, that the person or firm submit to a peer review of the person’s or firm’s ability, skills, or quality of work, conducted in a fashion and by persons, entity, or entities as required by the board; and complete to the satisfaction of the board continuing professional education courses specified by the board.

Agreements for corrective action may be used by the board, or the complaint committee if authorized by the board, where the violation committed by the person or firm does not warrant disciplinary action pursuant to this subdivision or subdivision 4 or 6, but where the board, or the complaint committee if authorized by the board, determines that corrective action is required to prevent further such violations and to otherwise protect the public.  Warnings may be used by the board, or the complaint committee if authorized by the board, where the violation of the person or firm is de minimus, does not warrant disciplinary action under this subdivision or subdivision 4 or 6, and does not require corrective action to protect the public.  Agreements for corrective action must not be considered disciplinary action against the person’s or firm’s application, permit, registration or certificate, or practice privileges under section 326A.14.  However, agreements for corrective action are public data.  Warnings must not be considered disciplinary action against the person’s or firm’s application, permit, registration, or certificate or person’s practice privileges and are private data.

The order may prohibit the person or firm from providing professional services in whole or in part, as the facts may require, and may condition the end of such suspension on compliance with a statute, rule, or order that the board has issued or is empowered to enforce.  The order must set forth the rights to hearing contained in this section and must state the reasons for the entry of order.

The board may impose a civil penalty not to exceed $2,000 per violation upon a person or a firm that violates an order, statute, or rule that the board has issued or is empowered to enforce.  The board may, in addition, impose a fee to reimburse the board for all or part of the cost of the proceedings, including reasonable investigative costs, resulting in disciplinary or corrective action authorized by this section, the imposition of civil penalties, or the issuance of a cease and desist order.  The fee may be imposed when the board shows that the position of the person or firm that violates a statute, rule, or order that the board has issued or is empowered to enforce is not substantially justified, unless special circumstances make an award unjust, notwithstanding the provisions of Minnesota Rules, part 1400.8401.  Any person or entity who prepares or reports on financial statements or schedules for a client for a fee is subject to this section and the practice of the person or entity may be disciplined by the board as provided for in this section.  The board may discipline a person or entity based on violations of this chapter, the board’s rules, or misrepresentations made by the person or entity regarding the work the person or entity performed.

The board may reinstate a suspended, revoked, or surrendered certificate, registration, or permit or suspended, revoked, or surrendered practice privileges upon petition of the person or firm holding or formerly holding the registration, permit, or certificate, or practice privileges.  The board may, in its sole discretion, require that the person or firm submit to the board evidence of having obtained up to 120 hours of continuing professional education credits that would have been required had the person or firm held a registration, certificate, permit, or practice privileges continuously.  The board may, in its sole discretion, place any other conditions upon reinstatement of a suspended, revoked, or surrendered certificate, permit, registration, or of practice privileges that it finds appropriate and necessary to ensure that the purposes of this chapter are met.  No suspended certificate, registration, permit, or practice privileges may be reinstated until the former holder, or person with practice privileges has completed one-half of the suspension.

Minn. Stat. § 326A.10 provides that only a licensee and individuals who have been granted practice privileges under section 326A.14 may issue a report on financial statements of any person, firm, organization, or governmental unit that results from providing attest services, or offer to render or render any attest service.  Only a certified public accountant, an individual who has been granted practice privileges under section 326A.14, a CPA firm, or, to the extent permitted by board rule, a person registered under section 326A.06, paragraph (b), may issue a report on financial statements of any person, firm, organization, or governmental unit that results from providing compilation services or offer to render or render any compilation service.  These restrictions do not prohibit any act of a public official or public employee in the performance of that person’s duties or prohibit the performance by any nonlicensee of other services involving the use of accounting skills, including the preparation of tax returns, management advisory services, and the preparation of financial statements without the issuance of reports on them.  Nonlicensees may prepare financial statements and issue nonattest transmittals or information on them which do not purport to be in compliance with the Statements on Standards for Accounting and Review Services (SSARS).  Nonlicensees registered under section 326A.06, paragraph (b), may, to the extent permitted by board rule, prepare financial statements and issue nonattest transmittals or information on them.

A person who does not hold a valid certificate issued under section 326A.04 or a practice privilege granted under section 326A.14 shall not use or assume the title “certified public accountant,” the abbreviation “CPA,” or any other title, designation, words, letters, abbreviation, sign, card, or device tending to indicate that the person is a certified public accountant.

A person or firm that does not hold a valid certificate or permit issued under section 326A.04 or 326A.05 or has not otherwise complied with section 326A.04 or 326A.05 as required in this chapter shall not assume or use the title “certified accountant,” “chartered accountant,” “enrolled accountant,” “licensed accountant,” “registered accountant,” “accredited accountant,” “accounting practitioner,” “public accountant,” “licensed public accountant,” or any other title or designation likely to be confused with the title “certified public accountant,” or use any of the abbreviations “CA,” “LA,” “RA,” “AA,” “PA,” “AP,” “LPA,” or similar abbreviation likely to be confused with the abbreviation “CPA.” The title “enrolled agent” or “EA” may only be used by individuals so designated by the Internal Revenue Service.  No person holding a certificate or registration or firm holding a permit under this chapter shall use a professional or firm name or designation that is misleading about the legal form of the firm, or about the persons who are partners, officers, members, managers, or shareholders of the firm, or about any other matter. bHowever, names of one or more former partners, members, managers, or shareholders may be included in the name of a firm or its successor.


Inside Regulation of Accountants – Minnesota