Application Of Chapter - Accountants - Business & Professions - CA

Section § 5050

In California, you can't practice as a public accountant unless you have a valid permit from the board or meet specific practice privilege requirements. However, if you're a licensed accountant from another country, you can temporarily work in California if you follow that country's accounting rules and don't claim to hold a California permit.

(a) Except as provided in subdivision (b) of this section, in subdivision (a) of Section 5054, and in Section 5096.12, no person shall engage in the practice of public accountancy in this state unless the person is the holder of a valid permit to practice public accountancy issued by the board or a holder of a practice privilege pursuant to Article 5.1 (commencing with Section 5096).

(b) Nothing in this chapter shall prohibit a person who holds a valid and current license, registration, certificate, permit, or other authority to practice public accountancy from a foreign country, and lawfully practicing therein, from temporarily engaging in the practice of public accountancy in this state incident to an engagement in that country, provided that:

(1) The temporary practice is regulated by the foreign country and is performed under accounting or auditing standards of that country.

(2) The person does not hold themselves out as being the holder of a valid California permit to practice public accountancy or the holder of a practice privilege pursuant to Article 5.1 (commencing with Section 5096).

public accountancy valid permit practice privilege

Section § 5050.1

If you're working as an accountant in this state, you're automatically agreeing that the state board in charge of accounting issues can oversee your work and discipline you if needed. This is already a part of the current rules.

If you hold accounting certification from another place, you're considered to have chosen your home licensing authority to receive legal notices or subpoenas on your behalf if there's an action or case involving you here.

(a) Any person that engages in any act that is the practice of public accountancy in this state consents to the personal, subject matter, and disciplinary jurisdiction of the board. This subdivision is declarative of existing law.

(b) Any person engaged in the practice of public accountancy under subdivision (a) is deemed to have appointed the regulatory authority of the state or foreign jurisdiction that issued the person’s permit, certificate, license or other authorization to practice as the person’s agent on whom notice, subpoenas, or other process may be served in any action or proceeding by or before the board against or involving that person.

public accountancy disciplinary jurisdiction accounting certification

Section § 5050.2

This section outlines the board's authority to take action against individuals with authorization to practice, such as revoking, suspending, fining, or disciplining them for violations or misconduct. It also establishes procedures for reinstating authorization after revocation. Moreover, it allows for administrative suspension following specific procedures for certain infractions. The rules follow the Administrative Procedure Act for disciplinary actions.

(a) The board may revoke, suspend, issue a fine pursuant to Article 6.5 (commencing with Section 5116), or otherwise restrict or discipline the holder of an authorization to practice under subdivision (b) of Section 5050, subdivision (a) of Section 5054, or Section 5096.12 for any act that would be a violation of this code or grounds for discipline against a licensee or holder of a practice privilege, or grounds for denial of a license or practice privilege under this code. The provisions of the Administrative Procedure Act, including, but not limited to, the commencement of a disciplinary proceeding by the filing of an accusation by the board shall apply to this section. Any person whose authorization to practice under subdivision (b) of Section 5050, subdivision (a) of Section 5054, or Section 5096.12 has been revoked may apply for reinstatement of the authorization to practice under subdivision (b) of Section 5050, subdivision (b) of Section 5054, or Section 5096.12 not less than one year after the effective date of the board’s decision revoking the authorization to practice unless a longer time, not to exceed three years, is specified in the board’s decision revoking the authorization to practice.

(b) The board may administratively suspend the authorization of any person to practice under subdivision (b) of Section 5050, subdivision (a) of Section 5054, or Section 5096.12 for any act that would be grounds for administrative suspension under Section 5096.4 utilizing the procedures set forth in that section.

revocation suspension discipline

Section § 5051

This law outlines what it means to practice public accountancy. If someone does tasks like advertising themselves as an accountant, maintains an office for accounting work, or performs accounting, auditing, or tax services for money, they are considered to be practicing public accountancy. Specifically, this includes activities like keeping financial books, preparing or certifying reports, and offering management consulting or financial planning to clients. However, if someone only does certain specific activities, like bookkeeping or tax preparation, and doesn't market themselves as a certified public accountant, they aren't considered to be practicing public accountancy in the legal sense.

Except as provided in Sections 5052 and 5053, a person shall be deemed to be engaged in the practice of public accountancy within the meaning and intent of this chapter if they do any of the following:

(a) Hold themselves out to the public in any manner as one skilled in the knowledge, science, and practice of accounting, and as qualified and ready to render professional service as a public accountant for compensation.

(b) Maintain an office for the transaction of business as a public accountant.

(c) Offer to prospective clients to perform for compensation, or does perform on behalf of clients for compensation, professional services that involve or require an audit, examination, verification, investigation, certification, presentation, or review of financial transactions and accounting records.

(d) Prepare or certify for clients reports on audits or examinations of books or records of account, balance sheets, and other financial, accounting and related schedules, exhibits, statements, or reports that are to be used for publication, for the purpose of obtaining credit, for filing with a court of law or with any governmental agency, or for any other purpose.

(e) In general or as an incident to that work, render professional services to clients for compensation in any or all matters relating to accounting procedure and to the recording, presentation, or certification of financial information or data.

(f) Keep books, make trial balances, prepare statements, make audits, or prepare reports, all as a part of bookkeeping operations for clients.

(g) Prepare or sign, as the tax preparer, tax returns for clients.

(h) Prepare personal financial or investment plans or provide to clients products or services of others in implementation of personal financial or investment plans.

(i) Prepare management consulting services to clients.

The activities set forth in subdivisions (f) to (i), inclusive, are “public accountancy” only when performed by a certified public accountant or public accountant, as defined in this chapter.

A person is not engaged in the practice of public accountancy if the only services they engage in are those defined by subdivisions (f) to (i), inclusive, and they do not hold themselves out, solicit, or advertise for clients using the certified public accountant or public accountant designation. A person is not holding themselves out, soliciting, or advertising for clients within the meaning of this section solely by reason of displaying a CPA or PA certificate in their office or identifying themselves as a CPA or PA on other than signs, advertisements, letterhead, business cards, publications directed to clients or potential clients, or financial or tax documents of a client.

public accountancy certified public accountant accounting services

Section § 5052

This section makes it clear that if someone is hired to do bookkeeping tasks like keeping books, making balances, or preparing reports, this isn't regulated by this chapter, as long as they don't present their reports as being verified by a certified public accountant. Additionally, it ensures that public accountants who registered before the end of 1955 aren't affected by any changes in these rules.

Nothing in this chapter shall apply to any person who as an employee, independent contractor, or otherwise, contracts with one or more persons, organizations, or entities, for the purpose of keeping books, making trial balances, statements, making audits or preparing reports, all as a part of bookkeeping operations, provided that such trial balances, statements, or reports are not issued over the name of such person as having been prepared or examined by a certified public accountant or public accountant.

Nothing contained in this chapter shall affect, limit or be construed as affecting or limiting the rights of any public accountant who met the requirements of prior statutes and who was registered with the board as a public accountant on or before December 31, 1955.

bookkeeping operations trial balances financial statements

Section § 5053

This law allows people who aren't certified public accountants (CPAs) or public accountants to work under the supervision of a CPA or public accountant. These employees can assist but cannot sign any official statements. This doesn't affect attorneys working in their legal practice.

Nothing contained in this chapter precludes a person who is not a certified public accountant or public accountant from serving as an employee of, or an assistant to, a certified public accountant or public accountant or partnership or a corporation composed of certified public accountants or public accountants holding a permit to practice pursuant to this chapter if the employee or assistant works under the control and supervision of a certified public accountant, or a public accountant authorized to practice public accountancy pursuant to this chapter and if the employee or assistant does not issue any statement over their name.

This section does not apply to an attorney at law in connection with the practice of law.

certified public accountant public accountant employee

Section § 5054

This law allows out-of-state accountants with valid licenses to prepare tax returns for California residents or estates without a California permit, as long as they don't physically enter California, solicit clients here, or claim they are licensed in California. The board can set limits on how many returns they can prepare.

(a) Notwithstanding any other provision of this chapter, an individual or firm holding a valid and current license, certificate, or permit to practice public accountancy from another state may prepare tax returns for natural persons who are California residents or estate tax returns for the estates of natural persons who were clients at the time of death without obtaining a permit to practice public accountancy issued by the board under this chapter or a practice privilege pursuant to Article 5.1 (commencing with Section 5096) provided that the individual or firm does not physically enter California to practice public accountancy pursuant to Section 5051, does not solicit California clients, and does not assert or imply that the individual or firm is licensed or registered to practice public accountancy in California.

(b) The board may, by regulation, limit the number of tax returns that may be prepared pursuant to subdivision (a).

out-of-state accountants tax return preparation California residents

Section § 5055

This law says that only individuals who have received a certified public accountant (CPA) certificate from the board or are authorized to practice accounting in California can call themselves a "certified public accountant" or use the abbreviation "C.P.A.". Anyone else, except a registered firm, cannot use this title or anything suggesting they are a CPA.

Any person who has received from the board a certificate of certified public accountant, or who is authorized to practice public accountancy in this state pursuant to Article 5.1 (commencing with Section 5096), may, subject to Section 5051, be styled and known as a “certified public accountant” and may also use the abbreviation “C.P.A.” No other person, except a firm registered under this chapter, shall assume or use that title, designation, or abbreviation or any other title, designation, sign, card, or device tending to indicate that the person using it is a certified public accountant.

certified public accountant C.P.A. accounting certification

Section § 5056

If you have received a public accountant certificate from the board, you can officially call yourself a “public accountant” and use the abbreviation “P.A.” This title is only for those certified or for firms registered with the board. No one else is allowed to use these titles or anything similar that might imply they are a public accountant.

Any person who has received from the board a certificate of public accountant may, subject to Section 5051, be styled and known as a “public accountant” and may also use the abbreviation “P.A.” No other person, except a firm registered under this chapter, shall assume or use that title, designation, or abbreviation or any other title, designation, sign, card, or device tending to indicate that the person using it is a public accountant.

public accountant certificate of public accountant P.A. abbreviation

Section § 5057

This law says that a public accountant with a valid license from another state doesn’t need a California permit to work in California, but only if certain conditions are met. They can only work for clients based in other states, with the work involving products to be delivered outside California. They can’t seek out clients in California or claim to be licensed there. This exception only applies to short-term work related to out-of-state clients.

Notwithstanding any other provision of law, an individual holding a valid and current license, certificate, or permit to practice public accountancy from another state shall be exempt from the requirement to obtain a permit to practice public accountancy issued by the board under this chapter or to secure a practice privilege pursuant to Article 5.1 (commencing with Section 5096) if all of the following conditions are satisfied:

(a) The individual’s client is located in another state.

(b) The individual’s engagement with the client relates to work product to be delivered in another state.

(d) The individual does not assert or imply that they are licensed to practice public accountancy in California.

(e) The individual’s practice of public accountancy in this state on behalf of the client located in another state is of a limited duration, not extending beyond the period required to service the engagement for the client located in another state.

(f) The individual’s practice of public accountancy in this state specifically relates to servicing the engagement for the client located in another state.

out-of-state accounting public accountancy license license exemption

Section § 5058

This law states that people or partnerships cannot use titles or abbreviations like “chartered accountant,” “certified accountant,” or others that might be confused with “certified public accountant” (CPA) or “public accountant” unless they are actually qualified as such. However, people who are certified as accountants in other countries can use their foreign titles alongside CPA, and those recognized as enrolled agents by the IRS can use the abbreviation 'E.A.'

No person or partnership shall assume or use the title or designation “chartered accountant,” “certified accountant,” “enrolled accountant,” “registered accountant” or “licensed accountant,” or any other title or designation likely to be confused with “certified public accountant” or “public accountant,” or any of the abbreviations “C.A.,” “E.A.,” “R.A.,” or “L.A.,” or similar abbreviations likely to be confused with “C.P.A.” or “P.A.”; provided, that any person qualified as a certified public accountant under this chapter who also holds a comparable title granted under the laws of another country may use such title in conjunction with the title of “certified public accountant” or “C.P.A.” and provided, that any person enrolled to practice before the Internal Revenue Service and recognized as an enrolled agent may use the abbreviation “E.A.”

chartered accountant certified accountant enrolled accountant

Section § 5058.1

This law says that people or businesses can't use any titles with 'certified public accountant' or 'public accountant' if those titles are misleading or untrue. Additionally, there's a board that can make rules about what titles can be used.

A person or firm may not use any title or designation in connection with the designation “certified public accountant” or “public accountant” that is false or misleading.

The board may adopt regulations covering the use of titles or designations.

certified public accountant public accountant false title

Section § 5058.2

If you have an inactive CPA license in California and you refer to yourself as a certified public accountant or use the CPA title on materials like business cards or websites, you must include 'inactive' right after your designation to make it clear you are not currently practicing.

The holder of an inactive license issued by the board pursuant to Section 462, when lawfully using the title “certified public accountant,” the CPA designation, or any other reference that would suggest that the person is licensed by the board on materials such as correspondence, internet websites, business cards, nameplates, or name plaques, shall place the term “inactive” immediately after that designation.

inactive license certified public accountant CPA designation

Section § 5058.3

If you have a retired CPA license and you're using any title or designation like 'certified public accountant' or 'CPA' in public materials, you must include the word 'retired' right after it to show you're no longer an active CPA.

The holder of a retired license issued by the board pursuant to Section 5070.1, when lawfully using the title “certified public accountant,” the CPA designation, or any other reference that would suggest that the person is licensed by the board on materials such as correspondence, internet websites, business cards, nameplates, or name plaques, shall place the term “retired” immediately after that title, designation, or reference.

retired CPA certified public accountant CPA designation

Section § 5058.4

If a certified public accountant (CPA) has a permit labeled as 'military inactive,' they must include the term 'military inactive' after their CPA title or designation when using professional materials like business cards or websites.

The holder of a permit in a military inactive status issued by the board pursuant to Section 5070.2, when lawfully using the title “certified public accountant,” the CPA designation, or any other reference that would suggest that the person is licensed by the board, on materials such as correspondence, internet websites, business cards, nameplates, or name plaques, shall place the term “military inactive” immediately after that title, designation, or reference.

military inactive CPA certified public accountant designation CPA title usage

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