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CPA Licensure: Mobility and Substantial Equivalency

Broadening Pathways to CPA Licensure

The certified public accountant (CPA) credential is a prestigious and widely recognized certification in the field of accounting and finance. In the context of the CPA credential, "mobility" and "substantial equivalency" are two important concepts from the Uniform Accountancy Act relating to the ability of CPAs to practice across state lines within 54 of 55 licensing jurisdictions. 

As the MNCPA and other parties look at ways to broaden the pathways to CPA licensure, confusion has mounted around mobility versus substantial equivalency. 

Jen Leary headshot"As one of the largest firms in Minnesota, CLA applauds Minnesota for being an advocate for collaboration and change and taking the necessary steps to address the inadequacies in the current system. We are well aware of the mobility challenges that are ahead, and we believe that through the power of collaboration across key stakeholders we can work together to design a path forward."
— Jen Leary, CPA, CEO at CliftonLarsonAllen LLP

Let's compare these two concepts.

Mobility and substantial equivalency  both allow CPAs to practice across state lines . Mobility is  applies to CPAs with an active license in their home state, while substantial equivalency  applies to CPAs whose primary license is not in the state where they want to practice. 

Both concepts aim to facilitate interstate practice while ensuring that CPAs meet the necessary qualifications and standards. However, the specific requirements and processes may vary by state, so CPAs need to be aware of and comply with the regulations in the states where they wish to practice.

Mobility:

  • Mobility refers to the ability of a CPA licensed in one U.S. state to practice public accounting in another U.S. state without having to obtain an additional license in the new state.
  • The mobility concept simplifies the process for CPAs who wish to provide services to clients or employers in multiple states without the burden of obtaining separate licenses in each state.
  • Mobility is based on the idea that a CPA who has met the licensing requirements in one state should be deemed qualified to practice in other states without the need for  additional licensing.
  • To practice under mobility, a CPA typically needs to meet certain conditions, such as having an active license in their home stateand complying with any specific requirements set by the new state. 
  • Some states may impose additional conditions, such as completing specific continuing education courses, before practicing under mobility.

Substantial equivalency:

  • Substantial equivalency is the assessment that the prerequisites for obtaining a license in a specific state, including education, examinations, and professional experience, closely align with the model language set forth in the UAA.
  • Generally, substantial equivalency means the CPA's qualifications in their home state are deemed comparable to the requirements in a different state.
  • CPAs who wish to be licensed in another state under substantial equivalency often need to submit an application to that state's board of accountancy and demonstrate that they meet the substantial equivalency criteria. You may need to fulfill additional requirements such as an ethics exam in order to be licensed in that state.
  • Some states may have reciprocity agreements with specific other states, making it easier for CPAs from those states to practice in the reciprocating state under substantial equivalency.

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