The Minnesota Society of CPAs (MNCPA) is advancing legislation that would make the Minnesota CPA license an outlier and threaten the ability of Minnesota-licensed CPAs and CPA firms to practice across state lines — physically or virtually — without added fees, regulatory oversight, and compliance costs. Many AICPA members have reached out with questions and concerns about the proposal.
The MNCPA’s legislative intent is to attract people to become CPAs by reducing education requirements. The reality is that this bill will do little if anything to attract new talent to Minnesota and our profession. What it will do is create a host of real, negative, and immediate consequences that will harm current Minnesota CPAs and make it harder to attract new ones.
What you need to know
A Minnesota CPA license will no longer be viewed as equivalent to other states. It will become the most limiting in the nation.
The legislation introduces a pathway that reduces Minnesota’s educational requirement to become a CPA. NASBA (the National Association of State Boards of Accountancy, which represents CPA licensing boards across the country) has confirmed that adding an education-reducing pathway means that Minnesota CPA licenses are no longer equivalent to licenses in other states. As a result, Minnesota CPAs will lose the mobility to freely practice from state to state they currently enjoy and instead face new cost, administrative, and regulatory burdens to validate their licensing qualifications if they wish to practice or serve clients in other states.
Minnesota CPAs will lose the ability to freely practice across states.
CPA mobility is what allows CPAs to have their licenses recognized so they can easily practice across state lines. Mobility is dependent upon states having equivalent standards of education, experience, and exam.
It is helpful to view CPA mobility in the context of a driver’s license. Currently, Minnesota residents can freely drive across the border without having to first stop at the border of another state to receive permission to drive in that state. If Minnesota were to change its requirements to obtain a driver’s license, another state may view a Minnesota driver differently.
Under this legislation, Minnesota CPAs would effectively be stopped at the border and would be prevented from practicing in that state unless they obtain an additional license.
There will be no near-term benefit. But there will be immediate downsides.
There is no evidence that shows that the Minnesota proposal would increase the number of new individuals choosing to sit for the exam and then pursue a CPA license; it will be years before we know if this action could have any meaningful impact on the number of licensed CPAs eligible and competent to perform audit and assurance services. But the consequences on current CPAs will be immediate. What will happen is that as soon as the bill is signed, the Minnesota license will no longer be equivalent, new regulatory hurdles to practice in other states will go into effect, and Minnesota will have the most restrictive license in the nation. This means that all the negatives would be felt, while none of the hoped-for benefits would materialize.
Minnesota CPAs will be at a competitive disadvantage.
Minnesota licensees would not be able to provide services to a client in another state without first having a re-assessment of their license qualifications, and in most cases, if not all, applying for a license in that jurisdiction. Minnesota licensees would lose the ability to seamlessly practice in another state.
The bill will hurt — not help — the pipeline.
This legislation would create the most limiting CPA license in the nation. This will be a disincentive to pursuing a Minnesota license. Why would new CPAs choose a state in which the license creates barriers and limits career flexibility and mobility when other states do not?
Bottom line: This proposal will do more harm than good. Encouraging new CPAs is a well-intentioned goal, but this is not the right way to do it.
What you can do: Carefully consider how this proposal would impact you. Some questions to consider include:
Does this proposal provide an efficient solution for a national profession?
Do the negative mobility impacts outweigh the consequences of this legislation?
What steps will you need to take to comply with other states’ licensing requirements?
Will the increased compliance challenges negatively impact your ability to service clients in a timely manner in other states?
If you have concerns about the consequences to you as a CPA, or to your firm or employer, we ask that you share your concerns with the AICPA by filling out this quick survey. To view the first call to action the AICPA sent on this issue, please visit our protecting mobility page. The AICPA values the feedback of members in Minnesota and will defend the importance of mobility for the profession and the public.