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Corporate CPAs: What's your status?

BOA Business

Anne Janotta Erickson, MNCPA senior business & industry marketing coordinator | September 2018 Footnote

It's time for a status update.

No, no. Put down your smartphone because we're not talking about social media. Instead, let's focus on your CPA certificate status update.

Corporate CPAs have a choice when it comes to their certification status. Specifically, the Minnesota Board of Accountancy (BOA) allows corporate CPAs -- who aren't performing work on the side that requires an active license or firm permit -- to choose to maintain an active CPA certificate or go inactive.

Sorry, CPAs in public accounting. You don't get a choice. You must maintain an active CPA status.

Just like social media status updates, your CPA certificate status is a reputation builder, too. Understand the rules to ensure this status update always works in your favor.

What's the difference?

From exam to education to experience, active and inactive CPAs must meet the same initial certification requirements. So, what's the difference?

Use of the credential

Active CPAs can use the credential without restriction. That means, in addition to providing professional services allowed under active status rules, there's no holding back on resumes, business cards, LinkedIn, company marketing materials, etc. You name it and you can list your CPA credential on it.

Inactive CPAs don't have that flexibility. Instead, an inactive CPA must indicate their status when using the credential. Example: Connie P. Allan, CPA (inactive).

Holding yourself out or practicing as an active CPA when you aren't is a violation of BOA statute.

Required CPE

Active CPAs must maintain 120 CPE credits per rolling three-year reporting period, with a minimum of 20 hours per fiscal year. They must report their credits annually to the Minnesota BOA.  

Inactive CPAs don't have a CPE requirement and, therefore, have nothing to report to the Minnesota BOA.

Either way -- renew, renew, renew

Whether your status is active or inactive, you still must annually renew your CPA certificate by Dec. 31 through the BOA.

Too many inactive CPAs get this part of their CPA status update wrong. Some simply forget to renew. Others incorrectly believe they don't need to because they're inactive. Either way, it's wrong.

Change it up!

If you're a corporate CPA who doesn't provide attest or compilation services, you can change your status.

Inactive to active

Earn 120 CPE credits within a three-year period preceding the application. Submit necessary paperwork and fees to the BOA. You can switch to active status at any time during the year once the hours are completed using the "Status Change to Active" request form. If you want the change to be effective Jan. 1, use the BOA's renewal form.

Active to inactive

This change can be made during the BOA's renewal period between mid-September and 
Dec. 31. Indicate the status change within the BOA's renewal form. You must be compliant with CPE requirements in order to change your status. The status change is effective Jan. 1.

Retiring?

Take a moment to consider how your timing will impact your CPA certificate status. You can only go inactive on Jan. 1 if your CPE is compliant as of the prior June 30.

The BOA currently does not offer a retired certificate status, but inactive and exempt statuses are available. Make the change during renewal time and it will be effective Jan. 1. Inactive CPAs must renew annually; exempt CPAs do not. Note, exempt CPAs can't use the CPA designation in any way.

Can a CPA firm hire an inactive CPA?

A CPA can work in public accounting and continue to maintain an inactive certificate provided they perform no direct or indirect professional services for any client. Often, this applies to roles in human resources, sales and recruiting. Use of the CPA credential is allowed if the inactive modifier is used in tandem.

An inactive CPA cannot practice in public accounting or provide professional services for a client until they hold an active CPA certificate. 

Questions?

CPA certification is regulated through the Minnesota BOA. Reach them at 651-296-7938.

The MNCPA has answers. Visit www.mncpa.org/active for CPA certificate status details. Or reach out anytime at 952-831-2707 or email customerservice@mncpa.org.