Mobility is a practice privilege that generally permits a licensed CPA in good standing to practice in a state from outside of their principal place of business without obtaining another license, so long as the licensee meets certain state specific conditions.
For state accountancy boards that have adopted the Uniform Accountancy Act § 23 Safe Harbor language for mobility, this will allow those licensees who had practice privileges prior to a specific date to proceed to practice, so long as they have a license in good standing and no other state specific restrictions apply. Currently, Delaware, New Jersey, Texas, and Pennsylvania have adopted the UAA Safe Harbor Language for Mobility.
As of June 11, 2008:
Individual Practice Privilege (See MI Comp. Law § 339.727a) - An individual whose principal place of business is not in Michigan shall be considered to have qualifications substantially equivalent to Michigan requirements and shall have all the privileges of Michigan licensees and may practice public accountancy without the need to obtain a certificate, license, or temporary practice permit if the individual meets either or both of the following:
- Holds a valid license as a CPA from another licensing jurisdiction that requires, as a condition of licensure, that the individual meets all of the following:
- Has at least one hundred fifty (150) semester hours of college education including a baccalaureate or higher degree conferred by a college or university;
- Achieves a passing grade on the Uniform CPA Examination; and
- Possesses at least one (1) year of experience including providing any type of service or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax, or consulting skills, all of which may be obtained through government, industry, academic, or public practice as verified by a licensee; OR
- Holds a valid license as a CPA from another licensing jurisdiction that does not meet the above requirements, but such individual's CPA qualifications are substantially equivalent to those requirements. Any individual who passed the Uniform CPA Exam and holds a valid license issued by another licensing jurisdiction prior to January 1, 2012, is exempt from the education requirement of one hundred fifty (150) semester hours of college education including a baccalaureate or higher degree.
- Notwithstanding any other provision of law, an individual who offers or renders professional services, whether in person or by mail, telephone, or electronic means shall be granted practice privileges in Michigan, and no notice, fee, or other submission is required of that individual.
- Temporary Permit (See MI Comp. Law § 339.724(b) and MI Admin. R. 338.5140)
- A licensed CPA of another licensing jurisdiction who does not meet individual practice privilege requirements, or an accountant who is licensed in a foreign country for the practice of public accounting in that country, may temporarily and periodically engage in the practice of public accounting in Michigan if all of the following requirements are met:
- The individual is conducting a regular practice of public accounting in another licensing jurisdiction or foreign country.
- The temporary practice is conducted in conformity with MI Comp. Law § 339.736 and applicable rules promulgated by the director, if any.
- If requested by an insurer, a licensee who agrees to issue an audit report concerning the statutory financial statements of a domestic insurer shall include an opinion as to whether the financial information is presented according to statutory accounting principles as prescribed or permitted by Act 218 of 1956, or orders issued or rules promulgated under that act. An opinion issued may be separate from the audit report if the letter of engagement provides that the opinion be available for general distribution.
- The individual secures a temporary permit from LARA to conduct the practice in Michigan.
- If approved by LARA, the term of the permit begins on the date approved unless otherwise specified, and must be for a specified period, but must not be for more than one (1) year.
- The temporary practice shall be performed by or under the direct supervision of a licensed CPA, an individual with practice privileges, or the holder of a title from a foreign country who is recognized under this rule.
- A temporary permit is not required if the work relates to a Michigan-based division or subsidiary of an entity, if the parent entity is located in another state or foreign country and is a client of the CPA, firm, or foreign accountant, and if a separate presentation of financial statements with a related independent auditor's report or review report, or an attestation regarding the reliability of a representation or estimate, is not made for the division or subsidiary on a stand-alone basis.
- A temporary permit is not required if the work is to be performed through the applicant's employer who presently holds a Michigan license to practice public accountancy.
- A temporary permit issued to an accountant also constitutes a temporary permit for the accountant’s firm, if the accountant’s firm is not presently licensed in Michigan.
Firm Practice Privilege/Firm Registration Requirement (See MI Comp. Law § 339.724(h) and § 339.728(4) - (5)) - A firm that does not hold a Michigan license and that does not have an office in Michigan may provide its professional services in Michigan in the practice of public accountancy and use the CPA designation so long as it complies with the requirements listed below, whichever is applicable.
- A firm that is not required to obtain a Michigan license may perform a review engagement in accordance with SSARS, perform an examination, a review, or agreed-upon procedures engagement in accordance with the SSAE, or perform a compilation for a client in Michigan, only if it meets all of the following conditions:
- It has met Michigan firm ownership and peer review requirements;
- It performs those services through an individual who has practice privileges; and
- It is authorized or permitted to perform those services in the licensing jurisdiction where the individual has their principal place of business.
- A firm that is not required to obtain a Michigan license and that is not seeking to practice under the requirements in the bullet point above may perform attest services, or any other professional services within the practice of public accountancy, while using the title "CPA" or "CPA firm" in Michigan without a Michigan license only if it meets all of the following conditions:
- It performs those services through an individual with practice privileges;
- It is authorized or permitted to perform those services in the licensing jurisdiction where the individual has their principal place of business; and
- It meets Michigan ownership and peer review requirements.
Consent to Jurisdiction (See MI Comp. Law § 339.734(a)) - An individual exercising the practice privilege and the firm employing that individual simultaneously consent to all of the following as a condition of the exercise of that privilege:
- To the personal and subject matter jurisdiction and disciplinary authority of the Michigan State Board of Accountancy and the Michigan Department of Licensing and Regulatory Affairs (LARA);
- To comply with MI Comp. Law § 339.720 et seq. and applicable rules;
- In the event the license from the licensing jurisdiction of the individual's principal place of business is no longer valid, the individual will cease offering or rendering professional services in Michigan individually and on behalf of a firm; and
- To the appointment of the state board or other licensing authority that issued their license as the agent on which process may be served in any action or proceeding by the Michigan State Board of Accountancy against the individual or the firm employing that individual.
Peer Review Requirement (See MI Admin. R. 338.5501 and MI Comp. Law § 339.729(2)) - As of March 1, 2007, each licensed firm and sole practitioner that performs attest services, including audits, reviews, and compilations that are relied upon by third parties, must participate in a peer review program approved by the Michigan State Board of Accountancy.
- Each firm or sole practitioner required to take part in a peer review program shall enroll in the program of a qualified sponsoring organization within one (1) year of the earlier of the following:
- The firm or sole practitioner’s initial licensing date.
- The performance of services that require a peer review.
- The firm or sole practitioner shall not have to provide proof verifying a peer review to LARA until the second renewal following initial licensure or the performance of services requiring a peer review.
- Qualified sponsoring organizations include the AICPA peer review program and other entities that adhere to the peer review standards as decided by the Michigan State Board of Accountancy. With respect to an out-of-state firm required to obtain a Michigan license, a peer review sponsoring organization approved by another state in which that firm is licensed is presumed to be qualified in Michigan.
- Out-of-state firms required to obtain a peer review may, instead of enrolling in a program sponsored by an organization described above, satisfy the peer review requirement applicable in the state where that firm is licensed, verified proof of which must be given to LARA on their request.
Additional Requirements (See MI Comp. Law § 339.724 and MI Admin. R. 338.5139) - An individual shall not, as a condition of qualification for the practice privilege, be required to satisfy Michigan Continuing Professional Education (CPE) requirements provided that the individual satisfies the CPE requirements of the state of the individual’s principal place of business.
- This article does not prohibit the following:
- A person from preparing a financial report or tax return, not requiring the expression of an opinion on the report or return, for filing with a federal, state, or local governmental unit.
- An individual who may be employed by more than one (1) individual or firm from keeping books, making trial balances or statements, and preparing audits or reports, if the audits or reports are not used or issued by the employer as having been prepared by a CPA.
Restrictions (See MI Admin. R. 338.5405) - An individual licensee, a firm licensee, an individual with practice privileges, or an out-of-state firm may perform attest services as that term is defined below and in MI Comp. Law § 339.720, of an enterprise only if the individual licensee, firm licensee, individual with practice privileges, or out of-state firm is independent from the enterprise. The AICPA standards adopted in MI Admin. R. 338.5102(1) shall be used to decide if the individual or firm is independent from the enterprise.
Definitions (See MI Admin. R. 338.5101 and MI Comp. Law § 339.720) - "Attest" means providing any of the following services, but does not include providing a compilation:
- An audit or other engagement to be performed in accordance with the Statements on Auditing Standards (SAS).
- A review of a financial statement to be performed in accordance with the Statements on Standards for Accounting and Review Services (SSARS).
- An examination of prospective financial information to be performed in accordance with the Statements on Standards for Attestation Engagements (SSAE).
- An engagement to be performed in accordance with the Public Company Accounting Oversight Board (PCAOB) auditing standards.
- An examination, review, or agreed-upon procedures engagement to be performed in accordance with the SSAE, other than an examination described above.
"Compilation" means providing a service performed in accordance with SSARS that are presenting, in the form of financial statements, information that is the representation of management or owners without undertaking to express any assurance on the statements. "Firm" means a corporation, partnership, limited liability company (LLC), unincorporated association, sole proprietorship operating under an assumed name, or other legal entity. - “Out-of-state firm” means a firm that may provide certain services and use the title “CPA firm” without obtaining a Michigan firm license.
- "Practice of public accounting":
- Means rendering or offering to render an opinion on or attesting to or offering to attest to the reliability of a representation or estimate, including, but not limited to, the giving of an opinion in substance that one (1) or more of the following types of information concerning the entity that is the subject of the opinion present fairly the condition of the entity:
- Financial or other information about which the opinion is given.
- Facts respecting the entity's compliance with conditions established by law or contract, including, but not limited to, a statute, ordinance, regulation, grant, loan, or appropriation.
- The scope of the accounting procedures rendered in connection with the presentation of the entity's financial statement.
- Includes one (1) or more of the following activities when performed or offered to be performed by an individual who is holding out as a CPA for a client or a potential client:
- The issuance of reports in connection with any attest or compilation services.
- One (1) or more kinds of management advisory, financial advisory, or consulting services, including, but not limited to, business valuation, forensic accounting, and fraud examination services.
- The preparation of tax returns.
- The furnishing of advice on tax matters.
- "Report", when used with reference to an attest or compilation service, means an opinion, report, or other form of language that states or implies assurance as to the reliability of attested information or compiled financial statements and that also includes, or is accompanied by, any statement or implication that the individual or firm issuing it has special knowledge or competence in accounting or auditing. Such a statement or implication of special knowledge or competence may arise from use by the issuer of the report of names or titles indicating that the individual or firm is an accountant or auditor or from the language of the report itself. Report includes any form of language that disclaims an opinion when that form of language is conventionally understood to imply any positive assurance as to the reliability of the attested information or compiled financial statements referred to or special competence on the part of the individual or firm issuing that language, or both, and includes any other form of language that is conventionally understood to imply that assurance or special knowledge and competence, or both.
Statute and/or Regulation References MI Comp. Law § 339.720; § 339.724; § 339.727a; § 339.728; § 339.729; § 339.734; and MI Admin. R. 338.5101; 338.5139; 338.5140; 338.5405; 338.5501.
Disclaimer: The information contained in NASBA’s Accountancy Licensing Library and CPAmobility.org is for informational purposes only and should not be construed as legal advice or legal opinion. The information is based on current state board of accountancy law and rules which are publicly available. Because board law and rules are continuously changing, there may be a slight delay in law or rule effective dates and the information reflected in these websites. NASBA cannot guarantee a mobility outcome based solely on the information contained in these websites, as additional state factors not listed here may be applicable. It is the responsibility of each CPA licensee or permit holder to be knowledgeable of each state board's current laws and rules in the state(s) in which the licensee intends to practice via mobility.
Click Reciprocal Licensure and/or Firm Registration in the menu bar at the top of this page for additional information or if these practice privilege requirements do not apply to you or your firm. |
Subscribe