Practice privileges clarified for out-of-state CPAs

ANNAPOLIS, Oct. 9, 2006 — Maryland CPA firms (those with a Maryland firm permit) and licensed Maryland sole practitioners can hire and / or temporarily transfer CPAs from other states to work in Maryland without requiring a temporary or reciprocal license in Maryland, unless that CPA is a partner in charge of an audit.

That's a summary of Maryland Statute 2-102, which was clarified by the Maryland Association of CPAs in a recent letter to the Maryland Board of Public Accountancy.

The letter states that the statute "does not prohibit a licensee or permit holder from:

"employing a certified public accountant licensed by another state or a foreign country; or
"listing that individual as a certified public accountant, if the listing is followed by the name of or usual abbreviation for the other state or country where the individual is recognized as a certified public accountant."

In a recent meeting with the State Board, the letter states, "it was agreed that the license was required when a CPA was 'conducting an audit' in Maryland. Our research indicates that the 'term of art' in the profession for 'conducting an audit' is the partner in charge of an audit and / or the partner signing the audit report. Thus, the interprtation of this statute is such that any CPA who is not the partner in charge of or signing the audit report can transfer into the state without additional licensing. In the case of a partner in charge of an audit, that CPA is required to have a valid Maryland license.

"Futhermore," the letter continues, "any CPAs working under this statute should be listed on business cards or firm listings as a CPA with the usual abbreviation for the state or country where the individual is recognized as a CPA (for example, 'Joe Smith, CPA-NC' for North Carolina)."