You have a CPA…right?

So, you have CPA…have you confirmed their licensure status?

Without a doubt, Certified Public Accountants remain among the most trusted of professions. Even after the severe industry screw-ups surrounding Enron and WorldCom, CPAs serve a vital role in business and personal finances. The immense regulations concerning CPA licensure, and the ethics we must follow, only help reinforce the professional standard the CPA field has worked to further establish since the debacles of the early 2000s.

That said, not all individuals that hold themselves out as CPAs are, in fact, actively licensed and in good standing. CPAs are not licensed Federally, as some believe, but instead at the state level. Each state has their own regulatory body governing licensure or registration to CPAs for rendering services in their specific state. For South Carolina, it is SC LLR Board of Accountancy. Furthermore, each state has their own regulations concerning when a CPA or Firm needs to become licensed or registered in their state, directly or through reciprocity. The general rule of thumb is a CPA CANNOT hold themselves out as a CPA in a given state unless they are licensed or registered under reciprocity, even if said CPA has an active license in another state. For example, I cannot market myself in Georgia or Arizona as a CPA even though I am actively licensed in South Carolina–BUT, that does not mean I cannot serve clients in those states. In most cases, it boils down to how I promote myself. If I do not solicit work from a specific state, while also not holding myself out as a CPA when not licensed in that specific state, even if licensed in another state, I am generally OK performing “most” CPA services in any of the 50 states. Some exceptions apply, but they are mostly surrounding services my Firm does not even offer. If, however, I decide to actively hold myself out as a CPA in any given state, then I need to be licensed or registered in that state as a CPA. Example: I am currently licensed in South Carolina, both individually and at Firm level. While I may serve clients in other states, I cannot actively market myself in other states, in most cases, without becoming licensed or registered via reciprocity. Simple enough, in most cases–pay a fee, gain licensure via reciprocity. Or, if just one state, satisfy renewal requirements, pay a very modest renewal fee, and my license is renewed for another period of time–typically, one year.

Now, I ask a simple question: What would you do if you suddenly found out that you have been working with an individual holding themselves out as an actively licensed CPA in your state, but they actually are not licensed? CPA licensure or registration status is public information in every state, and I have come across individuals in the course of my career claiming to be CPAs whose licenses have lapsed, been revoked, or forfeited. Some of these terms mean the same thing in various states (South Carolina considers lapsed and revoked the same thing). If you are working with a CPA not licensed, and they have claimed they ARE licensed, it is effectively an act of fraud.

When you hire a CPA, identify the governing body of CPAs in your state and verify the status of their license. Do not let yourself be lied to by some individuals that choose to tarnish our industry through their unprofessional and fraudulent conduct. Many states will even publish action taken against an individual not properly licensed, or that has allowed their license to lapse or be revoked due to their own actions.

I am signing this as South Carolina CPA # 9553, licensed by SC LLR Board of Accountancy as of the date of this posting.

With best regards and a watchful eye,

Greg Bennett, CPA – September 22, 2021