Policy Advisory

Policy Advisory Board Policies and Guidelines (Accountancy)

Date: 12/11/2017
Referenced Sources: Division of Professional Licensure

Table of Contents

Advisory Ruling Regarding the Practice Privileges of Out-of-State Licensees Pursuant to M.G.L. c. 112 section 87B (h)(1)

It has come to the attention of the Board of Public Accountancy ("Board") that there are several states that have adopted mobility legislation, which allow Massachusetts individual licensees to practice in these states without having to obtain licenses, permits, and/or registrations in these states. However, it has also come to the Board's attention that several of these states, under their mobility legislation, have adopted the Uniform Accountancy Act ("UAA") §§ 23 and 7(a) , which require Massachusetts licensed firms to obtain permits and/or register in these states in order to practice and issue attest reports in these states.

Please be advised that:

Chapter 22 of the Acts of 2010 amended M.G.L. c. 112 section 87B (h)(2) to state:

"A person whose principal place of business is outside the commonwealth shall be deemed to have qualifications substantially equivalent to the commonwealth's requirements for the practice of public accountancy and shall be authorized to engage in the practice of certified public accountancy in the commonwealth, including offering and rendering professional services, whether in person or by mail, telephone or electronic means, if such person…"

M.G.L. c. 112 section 87D (a) was also amended to state:

"No person or firm not holding a valid license issued under section eighty-seven B or eighty-seven B½ shall issue a report on financial statements of any other person, firm, organization or governmental unit. This prohibition does not apply to an officer, partner or employee of any firm or organization affixing his signature to any statement or report in reference to the financial affairs of such firm or organization or subsidiary or franchisee of said organization with any wording designating the position, title or office that he holds therein; nor does it apply to any act of a public official or employee in the performance of his duties as such; nor does it apply to the performance by persons other than licensees of other services involving the use of accounting skills, including the preparation of tax returns, and the preparation of financial statements without the issuance of reports thereon; nor shall it apply to an individual qualifying to engage in the practice of certified public accountancy pursuant to paragraph (2) of subsection (h) of section 87B."

M.G.L. c. 112 section 87B (h)(1), however, makes it clear that the practice privileges afforded to out-of state licensees practicing in Massachusetts are limited to those licensees whose licensing state affords all of the same practice privileges to Massachusetts licensees practicing in that state, including but not limited to the ability to practice in that state without obtaining a license, permit, and/or registration. Specifically, M.G.L. c. 112 section 87B (h)(1) states:

"Notwithstanding any general or special law to the contrary, a person shall not engage in the practice of certified public accountancy pursuant to paragraph (2) unless such person holds a valid license as a certified public accountant from a state that permits a certified public accountant licensed by the commonwealth to qualify for substantial equivalency and to engage in the practice of certified public accountancy in that state and have all the privileges of a certified public accountant in that state without the need to obtain a certificate or license from that state."

Therefore, the Board issues this Advisory Ruling to inform all out-of state-licensees of the Board's intent to strictly enforce the statutory mandate of M.G.L. c. 112 section 87B (h)(1 ). As such, any practice of public accountancy in Massachusetts by an out-of-state licensee whose licensing state does not allow Massachusetts individual licensees and/or firms to practice public accountancy, and provide CPA services including financial statement audits, prospective financial information, PCAOB audit engagements, etc., in that state without having to obtain a license, permit, and/or registration in that state shall constitute unlicensed practice in Massachusetts for which sanctions may be imposed. ( See M.G.L. c. 112 §87D½ and M.G.L c. 112, §65A)

The Board is not aware of all state Board's Statutes and Regulations, but in the New England area (including New York state), only Rhode Island appears to allow "no notice, no fee" for all CPA services, and thus, only Rhode Island CPAs can enter our state with full mobility privileges. All other CPAs must inquire with their state Board of Accountancy for verification of full mobility privileges for MA CPAs in their state before coming to MA and providing all CPA services. Without such reciprocal privileges, CPA individuals or firms from these other states need a MA CPA license, and applications are available at our web site.

This Advisory Ruling is issued pursuant to a determination made by a majority of members present at the duly called meeting of the Board of Public Accountancy on June 24, 2010.

Policy#17-001 Massachusetts Board of Public Accountancy’s Position Statement

Massachusetts Board of Public Accountancy’s Position Statement on Legal Marijuana

The decision to provide professional services to the marijuana industry is a business decision for individual licensees and registered firms. The Board cautions that those licensees or firms that choose to provide services of any kind to this industry should diligently address the potential risks and uncertainties involved, including but not limited to the continued uncertainty surrounding enforcement of applicable federal drug laws and related provisions of the Internal Revenue Code.

After careful consideration, the Board has determined that Massachusetts licensees and firms that elect to provide services to the marijuana industry legalized in any state in which the licensee practices will not face action by the Board based solely on the fact that the licensee or firm is providing such services. However, licensees are reminded that the federal government views such activity as a federal criminal offense. The Board’s position does not negate the possibility that disciplinary action may be taken by the Board should a licensee be found guilty of a federal criminal act.

All licensees should be reminded that any and all professional services provided are subject to the same professional standards, laws and rules applicable to all other professional services provided by the licensee or firm.

The Board of Public Accountancy unanimously approved this statement on January 19, 2017

Referenced Sources: