Tony Novak Certified Public Accountant designation

Posted on Posted in Financial Planning

The State of Delaware approved my Certified Public Accountant certification on May 15, 2012. The details are posted at the link below. After working on this since 2004 (before my auto injury) I consider this a major mile mark.

The certificate is not a license to practice public accountancy in Delaware (or any other state) and I am still working on verifying my auditing experience for the New Jersey CPA license. Actually, I have no specific plans to practice public accountancy (auditing or reviews) in any state; my intent has been to continue to practice financial planning but to advance the range of services offered to clients.

(Editorial Note: I did change my plans after this 2012 article was published. My licence to practice was issued by Delaware in 2014 and I started a CPA practice in 2015).

Since it is most likely that I would practice in three states (Pennsylvania, New Jersey and Delaware) it makes sense to review the status and plans in each.

NEW JERSEY

Association

I am a member of the New Jersey Association of Certified Public Accountants. The members and association leaders have been a huge help in recent months helping to resolve my licensing stalemate. I have been active in association activities over the past year.

NJ Board of Accountancy

The NJ Board of Accountancy sent a letter last week indicating that there is still hope of verifying prior work experience under a presumably deceased CPA but that will require additional research. I understand that my application is complete except for that requirement.

Law regulating use of CPA designation

I have not yet reviewed the law with regard to the use of CPA designation for a professional not engaged in public accounting.

PENNSYLVANIA

Association

I am a member of the Pennsylvania Association of Certified Public Accountants but have not yet been active in association activities.

Pennsylvania Board of Accountancy

I have not yet had any communication with the Pennsylvania Board of Accountancy. The law section and my comment below indicates that there may be unanswered questions I should provide notification and so I expect to do that immediately.

Law regulating use of CPA designation

§ 11.9. Use of the designation ‘‘certified public accountant’’ and the abbreviation ‘‘CPA’’ solely as mark of achievement by individual without current license.

(a) An individual who holds a certificate of certified public accountant but does not maintain a current license to practice public accounting, or an individual who has received notification from the Board that he is qualified to receive a certificate of certified public accountant, may use the designation ‘‘certified public accountant’’ and the abbreviation ‘‘CPA’’ solely as a mark of achievement subject to the following conditions:

(1) The certificate of certified public accountant has not been suspended or revoked.

(2) The individual has notified the Board in writing that he wishes to be placed on inactive status.

(3) The individual does not practice or offer to practice public accounting and is not a member or employee of a public accounting firm.

(4) The individual does not hold himself out to be in the practice of public accounting when performing or offering to perform accounting, bookkeeping, tax or accounting-related matters.

(5) The individual does not use the designation ‘‘certified public accountant’’ or the abbreviation ‘‘CPA’’ in advertising, including listings and advertisements in phone directories, newspapers, magazines, electronic media and indoor and outdoor signs.

(6) The individual does not display the certificate of certified public accountant in a manner that suggests he is authorized to practice public accounting.

(7) The individual’s use of the designation ‘‘certified public accountant’’ and the abbreviation ‘‘CPA’’ under this section is limited to business cards, letterhead or other stationery, and resumes or curriculum vitae, subject to the following conditions:

(i) The word ‘‘inactive’’ must appear immediately adjacent to the designation or abbreviation.

(ii) Business cards, letterhead and other stationery must include the name of the individual’s employer and the individual’s job title or, if the individual is self-employed, the nature of the individual’s business.

(b) The following are examples of unlawful use under this section:

(1) The holder of a certificate of certified public accountant whose license is on inactive status has a sign in the window of his home that bears his name and the abbreviation ‘‘CPA.’’ Explanation: The sign is an offer to practice public accounting, which requires possession of a current license.

(2) The holder of a certificate of certified public accountant whose license is on inactive status and who is employed in private industry uses a business card that bears his name, the abbreviation ‘‘CPA,’’ his employer’s name and his job title. The individual shows the business card to an acquaintance and offers to set up an accounting procedure. Explanation: The offer is an offer to practice public accounting, which requires possession of a current license.

(c) An individual or entity that violates this section shall be subject to disciplinary action, as appropriate, under sections 9.1, 12, 14 and 16 of the act (63 P. S. § § 9.9a, 9.9c, 9.14 and 9.16).

Authority

The provisions of this § 11.9 section 9.3(a)(11) and (12) of The CPA Law (63 P. S. § 9.3(a)(11) and (12)).

Source

The provisions of this § 11.9 adopted November 30, 1990, effective December 1, 1990, 20 Pa.B. 5934; amended July 27, 2007, effective July 28, 2007, 37 Pa.B. 4055. Immediately preceding text appears at serial pages (206106) and (303385).

Pasted from <http://www.pacode.com/secure/data/049/chapter11/s11.9.html>

This section of the law does not address reciprocity issues with regard to a professional certificate holder in another state who wishes to use the CPA designation outside of the practice of public accountancy. Note that the misspelling “stationery” is apparently part of the issued legislation.

DELAWARE

Association

I am not a member of the Delaware Association of Certified Public Accountants.

Division of Professional Licenses

Details of Delaware CPA certificate

Law regulating use of CPA designation

§ 106. Certificate or permit required.

(a) The use of the title or designation “certified public accountant” or the abbreviation “CPA” or any other title, designation, words, letters, abbreviation, sign, card or device tending to indicate that a person is a certified public accountant shall be limited to a person who holds a valid certificate and permit to practice issued by the Board pursuant to this chapter or issued under the laws of another jurisdiction, except that a person who holds a valid certificate, but is not engaged in the practice of certified public accountancy or public accountancy, may use the abbreviation “CPA”; provided, that it is clearly indicated that such person is not holding himself or herself out as practicing certified public accountancy.

(b) The use of the title or designation “public accountant” or the abbreviation “PA” or any other title, designation, words, letters, abbreviation, sign, card or device tending to indicate that such person is a public accountant shall be limited to a person who holds a valid permit to practice.

27 Del. Laws, c. 98, § 1; Code 1915, § 981; Code 1935, § 1092; 24 Del. C. 1953, § 103; 55 Del. Laws, c. 193; 60 Del. Laws, c. 198, § 1; 65 Del. Laws, c. 167, § 1; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 139, § 1; 75 Del. Laws, c. 128, § 2.;

Pasted from <http://delcode.delaware.gov/title24/c001/index.shtml>

AICPA Statement

65. Use of the CPA Designation by Member Not in Public Practice

.130 Question—A member who is not in public practice wishes to use his or her CPA designation in connection with financial statements and correspondence of the member’s employer. The member also wants to use the CPA designation along with employment title on business cards. Is it permissible for the member to use the CPA designation in these manners?

.131 Answer—Yes. However, if the member uses the CPA designation in a manner to imply that he or she is independent of the employer, the member would be knowingly misrepresenting facts in violation of rule 102 [ET section 102.01]. Therefore, it is advisable that in any transmittal within which the member uses his or her CPA designation, he or she clearly indicate the employment title. In addition, if the member states affirmatively in any transmittal that a financial statement is presented in conformity with generally accepted accounting principles, the member is subject to rule 203 [ET section 203.01].

[Replaces previous ruling No. 65, Use of the CPA Designation by Member Not in Public Practice, February 1996, effective February 29, 1996.]

Pasted from <http://www.wiley.com/college/kieso/0471363049/dt/protool/Ethics/aicpa/et191b.htm>

(This AICPA statement would not appear to apply to me because I do not wish to use my name or CPA designation in connection with financial statements or correspondence for an employer who issues financial statements. No other statement from AICPA on the use of the CPA designation by professionals not in public practice).

I am now beginning the procedures that eventually lead to the AICPA’s “Personal Financial Specialist” designation and reasonably expect to complete these by the end of 2012.

2 thoughts on “Tony Novak Certified Public Accountant designation

  1. Opinion on the use of CPA mark
    Background:
    Tony Novak is financial planner with a CPA certificate license issued by the State of Delaware but not issues a license to practice. He is a resident of New Jersey and has applied for a NJ CPA license. The principal place of business of the financial planning practice is New Jersey although, due to Internet-based services, the practice is marketed in all states without a physical business presence in any state. Delaware uses a two tier CPA license process whereas New Jersey uses a single license. Novak does not wish to practice public accountancy but wishes to be in compliance with all applicable laws and regulations of the State of New Jersey regarding use of the “CPA” mark as a designation of personal achievement. The NJ license application was not approved pending verification of prior employment experience from a now deceased CPA. The question is whether Novak can use the “CPA” designation as a mark of achievement in his financial planning practice as long as it is clear that he is not offering service in public accounting.

    Discussion:
    Four potential sources of authority are identified:
    1) New Jersey statutes: state of residence
    2) Delaware statutes: where the CPA certificate license was issued
    3) Pennsylvania statutes: Novak owns a home and business in PA
    4) AICPA regulations: govern the use of “Personal Financial Specialist” designation, anticipated in 2014

    New Jersey law and the AICPA are silent on the use of the “CPA” mark as a notation of personal achievement outside the practice of public accountancy. NJ Laws focus on the practice of public accountancy as defined, meaning auditing and attestation services. AICPA regulations focus on fair disclosure and avoiding misleading representations.

    Pennsylvania requires the use of the word “inactive” next to the CPA mark of a non-licensed CPA using the mark as a designation of personal achievement. Delaware has similar law but requires the phrase “not in public practice” in the same manner. Both states are silent on the this specific issue with regard to a licensee issued by another state not in the practice of public accountancy working or domiciled within their boundaries. Since it would not be practical to follow multiple sets of laws with a contradicting disclosure phrase requirement, it appears that these state laws were meant for licensees specifically defined as under their jurisdiction.

    Applicable Delaware law:
    § 106. Certificate or permit required ›Effective Jan. 3, 2006.
    (a) The use of the title or designation “certified public accountant” or the abbreviation “CPA” or any other title, designation, words, letters, abbreviation, sign, card or device tending to indicate that a person is a certified public accountant shall be limited to a person who holds a valid certificate and permit to practice issued by the Board pursuant to this chapter or issued under the laws of another jurisdiction, except that a person who holds a valid certificate, but is not engaged in the practice of certified public accountancy or public accountancy, may use the abbreviation “CPA”; provided, that it is clearly indicated that such person is not holding himself or herself out as practicing certified public accountancy.

    Applicable Pennsylvania law:
    § 11.9. Use of the designation ‘‘certified public accountant’’ and the abbreviation ‘‘CPA’’ solely as mark of achievement by individual without current license.
    (a) An individual who holds a certificate of certified public accountant but does not maintain a current license to practice public accounting, or an individual who has received notification from the Board that he is qualified to receive a certificate of certified public accountant, may use the designation ‘‘certified public accountant’’ and the abbreviation ‘‘CPA’’ solely as a mark of achievement subject to the following conditions:
    (1) The certificate of certified public accountant has not been suspended or revoked.
    (2) The individual has notified the Board in writing that he wishes to be placed on inactive status.
    (3) The individual does not practice or offer to practice public accounting and is not a member or employee of a public accounting firm.
    (4) The individual does not hold himself out to be in the practice of public accounting when performing or offering to perform accounting, bookkeeping, tax or accounting-related matters.
    (5) The individual does not use the designation ‘‘certified public accountant’’ or the abbreviation ‘‘CPA’’ in advertising, including listings and advertisements in phone directories, newspapers, magazines, electronic media and indoor and outdoor signs.
    (6) The individual does not display the certificate of certified public accountant in a manner that suggests he is authorized to practice public accounting.
    (7) The individual’s use of the designation ‘‘certified public accountant’’ and the abbreviation ‘‘CPA’’ under this section is limited to business cards, letterhead or other stationery, and resumes or curriculum vitae, subject to the following conditions:
    (i) The word ‘‘inactive’’ must appear immediately adjacent to the designation or abbreviation.
    (ii) Business cards, letterhead and other stationery must include the name of the individual’s employer and the individual’s job title or, if the individual is self-employed, the nature of the individual’s business.
    (b) The following are examples of unlawful use under this section:
    (1) The holder of a certificate of certified public accountant whose license is on inactive status has a sign in the window of his home that bears his name and the abbreviation ‘‘CPA.’’ Explanation: The sign is an offer to practice public accounting, which requires possession of a current license.
    (2) The holder of a certificate of certified public accountant whose license is on inactive status and who is employed in private industry uses a business card that bears his name, the abbreviation ‘‘CPA,’’ his employer’s name and his job title. The individual shows the business card to an acquaintance and offers to set up an accounting procedure. Explanation: The offer is an offer to practice public accounting, which requires possession of a current license.
    (c) An individual or entity that violates this section shall be subject to disciplinary action, as appropriate, under sections 9.1, 12, 14 and 16 of the act (63 P. S. § § 9.9a, 9.9c, 9.14 and 9.16).

    Opinion
    The governing law in this circumstance is New Jersey. The individual residence and principal place of business of the financial planning practice are in New Jersey. Internet-based businesses without a physical location are typically regulated by the state where they register and maintain a postal mailing address.

    There is no action or circumstance existing or anticipated that would trigger regulation under the Pennsylvania law, Delaware law of AICPA regulations. New Jersey does not address the specific conditions under which the “CPA” mark may be used outside the practice of public accountancy as a mark of personal achievement.

    Under NJ law there is no prohibition against using the CPA designation as a mark of personal achievement outside the practice of public accountancy. It may be used provided there is no violation of the representation of practice laws.

    In the event that financial planning work was performed for a client living in Pennsylvania or Delaware, it appears that the reciprocity laws would apply rather than the PA or DE law. For example, if the business card of a NJ CPA financial planner were given to a Pennsylvania resident offering a financial planning service, the wording of the card would need to meet NJ requirements, not PA requirements.

  2. I discussion came up among CPAs on a professional website about one state’s advertising the use of a “licensed CPA”. I commented that in an ideal world there wouldn’t be any other type and this specific phrase would be redundant. I just think that “Certified” and “Licensed” are the same in the eyes of a consumer and we, as a profession, should not be splitting hairs to support the distinction. Unfortunately state laws still allow the use of the term among those not licensed to practice.

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