A CPA licensed in Texas accepts an engagement in Florida, misses the home-state CPE deadline by two months, and the Texas board issues a 90-day suspension. The Florida engagement is now in jeopardy too, even though Florida never opened its own file.
Each of the 55 U.S. jurisdictions (50 states plus D.C. and 4 territories) has its own state board of accountancy, created by state statute to protect the public by regulating who can hold out as a CPA. Authority sits at the state level because accounting affects local creditors, lenders, and consumers.
KEY: The state board, not the AICPA and not the IRS, issues your CPA license. Lose it at the state level and you cannot use the CPA designation anywhere.
State boards have four core powers:
- Grant initial CPA licenses
- Renew licenses (typically every 1-3 years)
- Investigate complaints and impose discipline
- Set CPE and ethics requirements for renewal
HIGH-FREQUENCY: A state board can revoke a CPA license for conduct that occurred entirely in another state.
Common mistakes
- Confusing the AICPA with state boards. The AICPA writes professional standards and the Code of Professional Conduct, but it does not issue or revoke licenses. The trap answer says "the AICPA suspended his license." The AICPA can only suspend or expel his membership.
- Treating Circular 230 disbarment as license loss. Circular 230 sanctions affect IRS practice rights only. A disbarred practitioner can still hold an active state CPA license and audit private companies. The trap answer says "the OPR revoked her CPA license."
- Missing the difference between suspension and revocation. Suspension is time-limited and reactivates automatically. Revocation is permanent and requires a fresh petition for reinstatement. The trap answer treats them as interchangeable.
Bottom line
- State boards of accountancy issue, renew, suspend, and revoke CPA licenses; federal authorities cannot.
- Three E's for licensure: Education (150 hours), Examination (Uniform CPA Exam, 4 sections), Experience (1-2 years supervised).
- NASBA coordinates the Uniform CPA Exam and co-authors the UAA model with the AICPA but licenses no one; states adopt substantial equivalency for mobility.
- Substantial equivalency grants mobility in adopting states without a separate license, but the host state retains disciplinary authority over in-state conduct.
Exam shortcut
When a question names a sanction, ask "who imposed it?" State boards revoke licenses. The OPR disbars from IRS practice. The AICPA expels from membership. The PCAOB bars from public-company auditing. The SEC bars from SEC practice. Match the body to the act. Remember: "State licenses, federal restricts." The state board is the only body that can take away the CPA designation itself. Three E's = Education, Examination, Experience.
The full lesson (about 2,212 words, 15 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- I.B1
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