Retirement is a time of transition, but you should pause before committing to CPA-retired status.
“We call it a final act,” said Donna Oklok, investigations supervisor at the Accountancy Board of Ohio (ABO). “When we talk to people about retirement, we purposefully phrase it that way. We require an affidavit, which limits the work you can do and the activities you can engage in after you’re retired, and it does require a reinstatement hearing if you want to return to practice.”
Once you decide to switch to CPA-retired status, there is no CPE requirement, and you can use that designation for the remainder of your life. But if, in retirement, you’re thinking about offering your skills in consulting or tax preparation, this status would severely limit what you could do.
“The affidavit we have says the person is attesting that they’re voluntarily giving up their right to practice public accounting,” Oklok said. “They can’t perform or offer to perform services in accounting, auditing, financial statements management advisory, financial advisory or consulting services. They are not going to do things like tax return preparation or provide advice on tax matters as a CPA.”
It’s common for the ABO to receive calls from CPAs who are retiring at the end of the year asking for guidance on what to do with their status, Oklok said. Once they learn of the CPA-retired limitations and the reinstatement hearing should they want to switch their status, they usually end up renewing their permit or choosing inactive status.
“The reinstatement process itself is not onerous, but the board sets the conditions to return to practice,” Oklok said. “They will look at CPE requirements, but they can even decide you might need to take the CPA exam again. They have a lot of leverage.”
Since Oklok started working at the ABO in December 2015, she said she has never seen someone request to switch from retired back to active status. She said they will occasionally run into situations where CPAs who are tired of complying with CPE requirements want to retire their license and mistakenly think they can continue to practice.
The retired status, Oklok said, is meant to prevent CPAs from casually switching from retired to active.
“If you’re putting yourself out to be a CPA and even if you’re saying you’re CPA retired, CPA means something,” she said. “It means something to people and they take that as gospel that you know exactly what you’re doing and that you are doing things like continuing education.”
And for those who are thinking of circumventing the rules, knowingly practicing while retaining CPA-retired status is not a wise choice, either.
“While they are CPA-retired, even though it’s a final status, we still retain jurisdiction over them,” Oklok said. “So we can revoke their status and also charge them with unlawful practice, because they’re not licensed to practice as a CPA. We really try to focus on educating people at the front of that. You can’t just retire because you don’t want to do your CPE and keep doing taxes. That’s not going to work out.”