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Accountancy Board meeting addresses “CPA Retired” status, CPE reporting concerns

Written on May 3, 2024

OSCPA Staff Report

The Accountancy Board of Ohio (ABO), the state government entity charged with licensing, regulating, and when necessary, disciplining CPAs, can significantly affect the practice of all CPAs. That is why OSCPA represents the profession at every ABO meeting and advocates for best-practice rulemaking. This meeting included a variety of topics: 

  • Based on the number of questions received about what “CPA Retired” status means and the impact it has on a retired CPA’s future work as an accounting professional, the ABO agreed it made sense to clarify existing Ohio Administrative Code Rule 4701-7-06. Currently, a CPA requesting a waiver of requirements (taking/reporting CPE and triennial renewal) must submit an affidavit that they are retired from public accounting practice. After receiving a waiver of requirements from the ABO, the individual must use the term “retired” after the CPA designation in a font size and style as that used for “CPA”.  

  • Recommended additions to Rule 4701-7-06 changes – which still need to go through the State of Ohio’s regulatory rule review process - include: 

  • Holders of “CPA Retired” status must be at least 55 years of age and not performing or offering to perform services for the public (defined in 4701-7-04), including but not limited to the use of accounting or auditing skills; issuance of reports on financial statements; or one or more types of management advisory, financial advisory, or consulting services; tax return preparation; or providing advice on tax matters. 

  • The restrictions above shall not preclude a “CPA Retired” from providing volunteer, uncompensated tax preparation services; participating in a government-sponsored business mentoring program; or serving on a board of directors for a non-profit or government-appointed advisory body. 

  • If the “CPA Retired” individual seeks to reestablish their Ohio CPA license, they must complete the CPE requirements as outlined in 4701-15-09 and request a reinstatement hearing before the ABO. 

The issue of accounting firms operating as an Employee Stock Ownership Plan (ESOP) was discussed. The ABO is still in research mode, evaluating how other professions and states address this ownership option. Their ultimate goal is to be flexible on forms of business accounting firms can use yet ensure Ohio accounting firms continue to maintain more than 50% ownership by licensed CPAs. 

Another area raised during discussions addressed CPE: quantity vs. quality? OSCPA’s Scott Wiley suggested the ABO and OSCPA collaborate on this important topic. ABO staff noted that the National Association of State Boards of Accountancy (NASBA) largely said this issue is up to each state, but the NASBA CPE Committee did recommend that states adopt a maximum number of CPE credits that can be accepted in a single day. Initial thoughts were that 12-15 hours would be acceptable, though the ABO would need to use judgment in any proposed rule change for consideration of exceptions. An example provided was that some multi-day learning events issue a single certificate with a single date. A proposed rule revision has not yet been drafted.  

The ABO continued discussion on an existing rule (4701-11-07) requiring licensees to report – within 30 days – any felony conviction or conviction of any crime (including misdemeanors) where dishonesty or fraud could be an element, or actions by another licensing body or government entity. On May 1 the ABO plans to send an email reminder notice to all Ohio licensees. NOTE: OSCPA covers this and other relevant topics in its ethics course. Each Ohio CPA is required to take at least three hours of ethics as part of their total 120 hours of CPE. 

As occurs at most ABO meetings, several CPAs were called to appear before the ABO for disciplinary hearings. Of the three that occurred in April, all were peer review related: 

  • A CPA representing his firm appeared before the ABO due to failure to timely renew its firm registration due October 2023. The required peer review had not been completed, which is a huge barrier to renewal. The CPA representing the firm shared that health challenges were a factor in related delays, and that the peer review had recently been completed. The ABO voted to revoke the firm’s registration, though stayed the action upon payment of a $750 penalty.  

  • A second hearing also dealt with a CPA firm’s peer review challenges. In this case, the firm had been terminated from the Peer Review Program last summer. As a result, the firm’s registration was not eligible for renewal and therefore expired in October 2023. A cease-and-desist order stopping the CPA firm from using the CPA designation was issued, but the firm did not comply. It also had not come into compliance with the peer review requirement. The CPA representing the firm said that going forward, he planned to address his compliance challenges. The ABO voted to revoke the CPA’s individual permit to practice, continue the expiration of the firm’s registration, and stated reapplication cannot take place until proof of meeting all remedial actions has occurred. 

  • The final disciplinary hearing involved an individual CPA firm owner who violated the rules of professional conduct by failing to renew its peer review registration last year. As with the second case, the CPA involved did not comply with the ABO’s cease-and-desist order. Unlike the first two cases, this CPA did not respond to outreaches from the ABO and did not request the opportunity to come before the Board to discuss the charges against her. This CPA’s individual permit and firm registration were both revoked for failure to meet licensing requirements.  

  • Four CPAs formally requested a waiver of fines primarily generated for two reasons: individuals who renewed their practice permit in late 2023 failed to take at least 20 hours of CPE each year of the total 120 hours required to renew, and individuals who missed a renewal deadline. One was so late that her permit to practice had been suspended. Each explained in their written correspondence why they were requesting refunds of some or all of their late fees/fines. Fines/late fees ranged from $200 to $570. All requests were denied. Of note: each letter is read out loud at the ABO meeting, so if you want to request a waiver, only include details you are comfortable sharing as part of the public record. 

The next ABO meeting will take place on Friday, May 24, in Columbus. While the meetings are held in person, watching it via Teams is an option, too. To receive a link, contact the ABO at 614-466-4135. If you have questions about these or other licensing issues, feel free to reach out to OSCPA at 614-764-2727.  

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