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Corporate CPAs: Step right up to this certification info

BOA Business

| September 2017 Footnote

Are you active or inactive?

If your response to this question is, 
"You betcha I'm active! I get my 10,000 steps a day," then this article is for you.

Forget fitness for a second. Let's instead talk about active and inactive CPA certificates.

You see, corporate CPAs have a choice in the type of certificate they hold. But often, this choice is misunderstood. Just like getting 10,000 steps a day requires an action plan, so too does maintaining your CPA certificate.

Use this information as a step in the right direction.

Definitions, please!

The Minnesota Board of Accountancy (BOA) issues CPA certificates. If you're in public accounting, your CPA certificate must be active. But corporate CPAs who aren't performing work on the side that requires an active license or a firm permit can choose to hold an active or inactive certificate.  

What's the difference? There are two biggies:

Flexibility in using the credential

Active CPAs can use the credential without restriction, but inactive CPAs don't enjoy that freedom. If you hold an inactive CPA certificate, you must indicate that whenever the credential is used.

Example: Charles P. Adams, CPA (inactive)

CPE requirement

Active CPAs must maintain 120 CPE credits per rolling three-year reporting period. Inactive CPAs don't have a CPE requirement.

Forget about it

Sure, mistakes happen. But when it comes to your CPA certificate, it's your responsibility to get things right. Avoid costly errors by steering clear of these common mistakes.

Oops No. 1: Forgetting to renew

All active and inactive CPAs must renew by Dec. 31 through the Minnesota BOA. Too many inactive CPAs fail to renew annually. The BOA revokes CPA certificates that have not been renewed for two consecutive years.

Oops No. 2: Forgetting to tell the BOA

Too many CPAs mistakenly believe that by doing nothing at renewal time, they are going "inactive." The BOA's inactive status is not a result of inaction. Going inactive requires following a specific process. Doing nothing will result in a revoked certificate.

Oops No. 3: Forgetting how to use the credential

Holding yourself out as an active CPA when you're inactive is against the law. Inactive CPAs are limited to using their credential only with an inactive modifier.

Oops No. 4: Forgetting to take enough CPE

You may be planning to go inactive, but that doesn't mean you can quit taking CPE. Active CPAs must maintain 120 CPE credits up until they switch to the inactive status on Jan. 1.

Ready for a change?

Corporate CPAs who don't provide attest or compilation services have the flexibility of modifying their certificate status.

Inactive to active

Earn 120 CPE credits within a three-year period preceding application. Submit necessary paperwork and fees to the BOA.

Active to inactive

Switching to inactive is available during the BOA's renewal period of early fall through Dec. 31. Within the BOA's renewal form, indicate "inactive" as your desired renewal status. Your CPE credits must comply as of June 30 of the previous three-year CPE period. Your inactive status will be effective Jan. 1.

Retiring?

CPAs nearing retirement should consider how their timing impacts their certificate status. You can only go inactive on Jan. 1 if your CPE is in compliance as of the previous June 30. And no, the BOA does not have a retired certificate status.