Michigan CPA License Defense

As a Michigan CPA, you have made many sacrifices along the way to harnessing a career in the accounting field. Despite all your hard work, mistakes or misunderstandings can snowball into disciplinary investigations that place your Michigan CPA license at risk. At best, Michigan State Board of Accountancy investigations can trigger lasting reputational damage. At their worst, these investigations can affect your ability to practice as a certified public accountant for the rest of your life.

If you are facing an investigation or upcoming hearing before the Michigan State Board of Accountancy, you must take a stand and make decisive choices that defend your license. For more information on how to craft a strategic defense that mitigates the consequences you may be facing, contact our nationwide Professional License Defense Team today by calling 888-535-3686 or completing our online contact form.

The Irreplaceable Role of Michigan CPAs

Michigan CPAs are pivotal to the state's vibrant financial ecosystem. Not only do Michigan CPAs act as stewards of fiscal integrity through the complex regulatory environment unique to the Great Lakes State, but they secretly keep the state moving. From the bustling automotive industry in Detroit to the agricultural heartlands and the burgeoning tech sector in Ann Arbor—Michigan, CPAs provide invaluable insights and guidance- relying on their finely tuned expertise to the state's diverse population and economic pockets.

With a profound understanding of state-specific tax regulations, business practices, and economic challenges, Michigan CPAs offer tailored solutions that drive growth, foster innovation, and ensure compliance.

The Michigan State Board of Accountancy

Section 339.720 of the state's Professional Occupational Code establishes the State Board of Accountancy as well as the Board's duties. Under state law, the Board of Accountancy oversees and regulates the accounting profession in the state, ensuring that all CPAs meet standards of practice and ethical conduct.

The governor-appointed Board consists of 9 members, 6 of whom are CPAs. Through its rule-making authority, the board establishes standards that ensure CPAs possess the necessary education, experience, and ethical grounding to serve the public effectively and safely. Some of the Board's rulemaking and oversight powers granted to it include the following:

Professional Conduct: Establishing rules of professional conduct to maintain high standards of competence and integrity.
Corporate Practice: Setting guidelines for corporations practicing public accounting.
Educational Qualifications: Defining the educational prerequisites for CPA exam eligibility.
Certification Requirements: Outlining the educational and experience criteria for CPA certification.
Board Procedures: Instituting procedural rules for board operations.
Institutional Recognition: Recognizing educational institutions that meet the board's standards.
Continuing Education: Regulating continuing education requirements for CPAs.
General Enforcement: Implementing any other rules necessary to enforce the provisions of the article.

As part of its regulatory powers, the Board can also launch investigations into alleged unprofessional or unethical conduct misconduct violations. If the Board determines that possible misconduct may have occurred, they can proceed with denying, limiting, suspending, or restricting CPA licenses.

Due Process

Before enforcing disciplinary consequences, the Board must ensure that the professional accused of misconduct receives Due Process. Due Process is a legal right afforded to Michigan CPAs under the United States and Michigan State Constitutions that allows them to be notified about the allegations against them and then be granted the opportunity to present their side of the story (their defense) before a third-party neutral decision-maker.

State CPA Licensure Requirements

Michigan CPAs must meet an exacting list of requirements to qualify for initial licensure. The summarized Michigan CPA licensure requirements include the following:

Education Requirements: Confirm that you've completed 150 semester hours from a recognized higher education institution, which includes a bachelor's degree or higher with a focus on accounting.
Experiential Requirements: You must accrue at least 2000 hours of qualifying experience within 1 to 5 years, supervised and verified by a licensed CPA.
Examination Requirements: Successfully pass the Uniform CPA or IQEX examination. Your results must come directly from the administering jurisdiction or the National Association of State Boards of Accountancy (NASBA).
Moral Character/Fitness Qualifications: You must demonstrate integrity, honesty, and fairness in your services to the public. If you've had any criminal proceedings or civil actions against you, you must show that you've been rehabilitated or that the incident doesn't relate to your CPA aspirations.
Fines, Fees, and Background Checks: Pay all necessary licensing fees and successfully pass a federal background check.

Continuing Education Requirements

In Michigan, Certified Public Accountants (CPAs) must adhere to specific continuing education (CE) requirements to maintain their licensure in order to demonstrate an ongoing commitment to professional development and ethical standards. The Michigan Bureau of Professional Licensing (BPL) oversees these requirements, ensuring CPAs provide the highest service and expertise to clients that coincide with the changing landscape of the business and financial worlds. To meet continuing education requirements, Michigan CPAs must achieve the following:

Annual Requirement: CPAs must complete 40 hours of continuing education annually.
Subject Breakdown: Of these 40 hours, a minimum of 8 hours must be in auditing and accounting, and 2 hours in ethics. Notably, 1 hour of the required 4 hours of ethics over a 2-year license cycle must cover Michigan's laws and rules.
Grace Period: Newly licensed CPAs are exempt from CE requirements for the first 12 months following the date of their original licensure.
Nonresident CPAs: Those whose principal place of business is outside Michigan but in a state with its own CE requirements may fulfill Michigan's CE requirements by complying with their home state's CE mandates at the time of their Michigan license renewal.

While Michigan CPAs are not required to submit proof of compliance, the Board conducts random audits to verify compliance across the profession. Failure to provide evidence of completed education hours can result in disciplinary action, including fines, suspension, or revocation of licensure.

Grounds for Disciplinary Action

Section 339.734 of the State's occupational code addresses misconduct violations that can threaten a Michigan CPA License. Grounds for disciplinary action under this Section include:

Fraud, deceit, dishonesty, or negligence in public accounting.
Departure from professional practice standards applicable at the time of engagement.
Criminal convictions with fraud, negligence, or dishonesty, including but not limited to the failure to file personal federal, state, or local income tax returns.
The cancellation, revocation, or suspension of a CPA license by another state or any other jurisdiction of the United States.
Failure to pay required CPA licensing fees.
Suspension or revocation of the right to practice public accounting before a state or federal agency or a public accounting oversight board.
Conduct deemed “discreditable” to the public accounting profession.
Determination of mental incompetency by a court of law.
Professional Violations regarding the preparation of tax returns, the furnishing of advice on taxation matters, the issuance of financial statement reports or other management, financial advisory, or consulting services.

In addition to misconduct, Michigan CPAs can face disciplinary proceedings due to sobriety issues, failure to pay court-ordered child support obligations, or even incompetency issues as declared by a court of law.

The Disciplinary Process

The Michigan Bureau of Professional Licensing (BPL) plays a pivotal role in ensuring the safety, health, and welfare of Michigan's citizens by licensing and regulating occupational and health professionals, including Certified Public Accountants (CPAs). The BPL operates as the designated “guardian of public interest” in the state. As a guardian, the BPL initiates investigations based on complaints from the public against licensed professionals who may have violated the Occupational Code. Complaints of alleged misconduct can be lodged by any member of the public, including colleagues, supervisors, and clients.

To ensure fairness throughout the process, all disciplinary matters handled by the Bureau must provide due process to the accused individual. Due process is simply a legal term that affords the CPA the right to be notified about the allegations against them and present a proper defense to a neutral third-party decision maker. The Disciplinary process aims to ensure Due Process within the following framework.

The Complaint and Investigation Phase

To file a complaint against a CPA or any licensed professional in Michigan, public members can visit the BPL's official website and select the relevant professional category to access the complaint form. Complaints can be filed online utilizing the Michigan Professional Licensing User System. In order to lodge a complaint, the reporting party will need to provide the following information:

The complainant's name and contact information.
The name and profession of the licensee.
A detailed account of the incident, including dates, locations, and any witnesses.
While anonymous complaints are possible, they may limit the investigation's scope due to a lack of follow-up capability.

Upon receiving a complaint, the BPL reviews it to determine if it suggests a potential violation of the Occupational Code. Depending on this preliminary assessment, the complaint may lead to an investigation, be dismissed if unrelated to a code violation, or be referred to another authority if it falls outside BPL's jurisdiction.

Although every investigation can vary, they are thorough. BPL investigations consist of interviews with colleagues and members of the public, evidence collection, and document review. It is not uncommon for the professional in question to be asked to provide a written or oral statement about the alleged misconduct. It's important to note that failure to respond to any request from the BPL for information, even during an investigation involving oneself, can trigger additional disciplinary proceedings.

If an investigation finds no substantiation for a code violation, the complaint is closed, and the complainant is notified. However, if a violation is identified, further action is taken, which may include:

Issuing a formal complaint, cease and desist order, summary suspension, or citation against the licensee.
The licensee can negotiate a settlement, demonstrate compliance, proceed to a contested case hearing, or not respond (leading automatically to a hearing).

Resolution and Penalties

An informal conference may be arranged to resolve the complaint, potentially leading to a formal settlement. If unresolved, a contested case hearing is held, referred to as an “administrative hearing.” Administrative hearings operate akin to mini-trials before an administrative law judge. At these hearings, both parties are expected to present evidence of law and fact, evidence, and witness testimony.

Final Decision and Appeal

Following the hearing, the hearing officer will issue a decision. Decisions can range from dismissing the matter to fines, penalties, and licensure actions such as license limitations, suspensions, or denials. Licensees have the right to appeal the department's decisions.

The Consequences of Losing Your Michigan CPA License

The consequences of losing your CPA license in Michigan extend far beyond the immediate inability to practice. Considering the substantial investment in your education and career, losing your CPA license can lead to severe financial strain, affecting your immediate and future income. At worst, you may never be able to work in the accounting profession again. At best, you will suffer severe reputational damage and must rebuild your life from the bottom up.

From a personal point of view, losing your license can lead you to feel anxious, hopeless, and depressed. If you are in a relationship or responsible for caring for children or other dependents, your entire family can feel the fallout as well, only worsening your feelings of shame and guilt.

Michigan CPA License Violation Defense

The Lento Law Firm's Professional License Defense Team recognizes the considerable time and energy you've committed to your professional journey. We understand the high stakes and are ready to support you without hesitation.

Our Team members have a wealth of experience representing clients nationwide, especially within the state of Michigan. Whether you are in Detroit, Lansing, Grand Rapids, Flint, Saginaw, or Bay City, our Team will navigate the intricate dealings with the State Accountancy Board.

Our Professional License Defense Team offers thorough support and customized strategic advice to defend your career and future. For more information on how we can help protect your Michigan CPA license, contact us at 888-535-3686or via our online form today.