When the Sarbanes-Oxley Act was enacted in 2002, it contained a provision urging CPA license-granting jurisdictions (i.e. boards of accountancy) to “make an independent determination of the proper standards applicable” in the various states.

As a result, the Michigan State Board of Accountancy made recommendations for changes to the Occupational Code, the State License Fee Act, the Criminal Procedures Act, and the rules and regulations by which the State Board enforces that law. Those changes were reflected in Public Acts 277, 278 and 279 of 2005, which were signed into law and became effective December 19, 2005. (Last month’s article in Leaders’ Edge provides an overview of this legislation.)

These new laws contain a number of provisions dealing with the unauthorized practice of accounting. One change, in MCLA 339.723, increases the fine for violation of the rules relating to unauthorized practice from $10,000 to
$25,000 per violation.

Another change, in MCLA 339.735, makes a violation of Section 723 a felony punishable by a fine of not more than $25,000 or imprisonment for not more than five years, or both. Previously, a violation was only a misdemeanor.

Section 735 also authorizes the Attorney General or the prosecuting attorney of any county to pursue an action for unauthorized practice in the appropriate county.

In addition, the MACPA has authority as an “affected person” under MCLA 339.601(5), (7) to “maintain injunctive action to restrain or prevent a person” from the unauthorized practice of accounting.

MACPA members, who have a vested interest in protecting the public and the CPA profession from unauthorized practice, can and should play a vital role in detecting instances of unauthorized practice and reporting them to the Association.

About the Author
Lawrence R. Donaldson, senior shareholder in the Mt. Clemens Office of Plunkett & Cooney, P.C. just completed his second four-year term as a member of the Michigan State Board of Accountancy.

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