Some important issues related to licensing are common to most, if not all, states. These include expiration and renewal of licenses at various intervals, continuing professional education requirements, fees related to licensing, education and/or experience requirements for licensing, standards of practice, and standards of conduct. Obviously, the candidate must have passed the CPA examination, making them a CPA who needs to be licensed.
A licensed CPA is expected and required to follow the standards of conduct and practice for his or her state. In order to remain licensed, the CPA must complete the required number of credit hours of continuing professional education. This amount varies by state, as does the reporting period. Normally, a minimum number of credit hours is required for each year, but is not always required to be reported each year. A basic and very important facet of continuing education is taking the professional ethics course, and reviewing the information as needed.
There are many different standards of practice followed by CPAs. These may vary by state, with some states adding their own standards to the industry standards from the various governing bodies. Some examples of the standards that are followed by a CPA involved in auditing are the Statements of Financial Accounting Standards, the Statements on Auditing Standards, the Statements on Standards for Accounting and Review Services, the Statements on Governmental Auditing Standards, the Statements of Governmental Accounting and Financial Reporting Standards, and the Statements on Standards for Attestation Engagements. Other standards of practice are followed in regard to tax advice services and consulting services.
Standards of conduct should not vary much from one state to another. Some of the major standards are that the CPA should act in the public interest, act with integrity and objectivity, and should be independent in both fact and appearance. Also, a CPA must possess professional competence, exercise due professional care, and follow generally accepted accounting principles. Standards of conduct normally also exist regarding confidentiality of client information, not performing services for a contingent fee, planning and supervision, advertising and soliciting, discreditable acts, and form of organization and name.
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