Jun 25, 2012

State Board Announces Firm License Amnesty, Plus Other Disciplinary Issues

By Mike Colgan, PICPA Executive Director and CEO

Last week the Pennsylvania State Board of Accountancy put a special notice on its website that announced an amnesty program that provides unlicensed firms with an opportunity to voluntarily register for a firm license in accordance with the CPA Law. Beginning July 1, 2012, the Board will offer firms that have never been licensed an opportunity to voluntarily register and obtain licensure without discipline or monetary penalty.

The Board thinks there is uncertainty, particularly among smaller firms, about the need to obtain a firm license from the Board. This move likely affects proprietors or smaller firms that have formed a corporate entity but never applied for a firm license. They may have mistakenly thought they could practice under their individual license. However, all accounting practices in Pennsylvania operating as a firm or “qualified association” as defined in Section 2 of the CPA Law need to be properly licensed with the Board. Only CPAs practicing as individuals outside of a corporate entity are able to practice public accounting based on their individual license. The CPA Law can be downloaded from the Board’s website.

You should note that this amnesty program does not pertain to firms that previously held a firm license from the Board that has since lapsed. This “lapsed firm license” issue is a problem for CPAs who renewed their individual licenses at Dec. 31, 2011, but possibly did not renew their firm license. Please check with your firm administrator or staff responsible for renewing your firm license. Sometimes turnover on the staff causes firm license renewal to fall through the cracks. This violation — inadvertent practice without a firm license — is near the top of disciplinary actions that come before the Board.

Amnesty applications will be available until Dec. 31, 2012, for firms that have never been, but have been required to be, licensed with the Board. You can obtain an application on the Board’s website.

I hope that all CPAs are properly licensed and that this issue does not affect many of our members.

In related news, House Bill 646 was approved last week by the Pennsylvania House by a vote of 197-0. This legislation, sponsored by Rep. Kate Harper, allows for a one-time expungement of minor disciplinary violations (CPE and inadvertent practice without a license) from a licensee’s disciplinary record on the LicensePA database available to the public. Currently, if a licensee has been disciplined by the Board for a minor CPE violation, for example, the licensee has a permanent disciplinary notation on the online record. This expungement language would allow a licensee to apply to have the disciplinary action removed from the record after a period of four years. The PICPA supports this legislation. The expungement language was originally part of our proposed changes to the CPA Law regarding attest experience (HB 2354), but it was removed because Harper’s bill covered all licensing boards in Pennsylvania.

Finally, HB 2354 — PICPA-supported legislation to amend the CPA Law to eliminate the 25 percent attest-hour requirement to become licensed in Pennsylvania — is scheduled to be voted on June 26th in the House Professional Licensure Committee. It is moving in Harrisburg, and we will keep you posted.
Update June 26, 2012: The committee unanimously reported Denlinger’s bill from committee. It now moves to the full house for consideration.

If you have questions or need clarification on any of these matters, please let me know. Thanks for taking the time to provide the PICPA with feedback.


Leave a comment

Follow @PaCPAs on Twitter
Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.