CPA license reciprocity, or certification by reciprocity, is designed for CPAs that currently hold a CPA license and want to move their principal place of practice to another jurisdiction, effectively changing their home jurisdiction.
CPA license reciprocity differs from the concept of mobility, since reciprocity involves a new license in the jurisdiction where a new principal place of practice will be located. Mobility, on the other hand, affords CPAs the opportunity to practice in another jurisdiction without applying for a new license, provided they maintain their CPA license in their home jurisdiction.
Only CPAs moving their principal place of business or practice to another jurisdiction need to apply for CPA license reciprocity.
Meeting Interstate CPA License Reciprocity Requirements
To obtain license reciprocity, CPAs must be very familiar with the rules and regulations governing practice privileges in the jurisdiction in which they want to set up business. CPA license reciprocity can only take place if the CPA can meet the same licensing requirements as a new candidate in that jurisdiction would be required to meet.
In general, CPAs may meet CPA license reciprocity requirements in one of two ways:
The National Association of State Boards of Accountancy (NASBA), through the Uniform Accountancy Act (UAA), along with the American Institute of Certified Public Accountants (AICPA), has facilitated the process of license reciprocity by encouraging jurisdictions to adopt “substantially equivalent” requirements for licensure.
The concept of substantial equivalency was developed as a way to allow jurisdictions to more seamlessly accommodate CPA mobility and CPA reciprocal licensing. NASBA’s National Qualification Appraisal Service (NQAS) ensures that its member jurisdictions, through periodical reviews, meet CPA licensure requirements that are in line with the UAA.
The UAA recognizes jurisdictions as being “substantially equivalent” if their license requirements include:
- The completion 150 credit hours with a bachelor’s degree
- The completion at least one year of practice as a CPA
- Successfully passing the Uniform CPA Examination
To date, the only jurisdiction that does not have CPA licensure requirements that are substantially equivalent is the U.S. Virgin Islands.
Education or Experience
CPAs that hold valid, unexpired licenses in a jurisdiction deemed not substantially equivalent may qualify for a reciprocal license if they meet the education and/or experience requirements of the jurisdiction in which they are applying.
How to Become Licensed as a CPA in Another State
Although each jurisdiction has its own, unique requirements regarding the CPA reciprocal licensure process (and candidates for license reciprocity should therefore check with each jurisdiction’s state board of accountancy to ensure they meet the outlined requirements), most reciprocal license application processes involve:
- An application for reciprocal licensure (usually requires the applicant to choose which route they are applying for licensure: substantial equivalency, experience, or education)
- A reciprocal certification/interstate exchange of information form, which must be completed by the state board of accountancy in which the applicant holds a valid, unrevoked license
- Official transcripts (if applying for licensure through education)
- Work experience verification form (if applying for licensure through experience, the form typically needs to be completed by the employer)
- A reciprocal license application fee
Ethics Examination Requirement
Some jurisdictions require the completion of an ethics course/examination before both initial and reciprocal CPA licensure can take place. Many jurisdictions now accept a passing score from the American Institute of Certified Public Accountants (AICPA) Comprehensive Ethics Course and Exam, while other states have their own examination. Individuals who come from a state that requires a passing score from the AICPA generally do not need to take the AICPA exam again for reciprocal licensure.
Reciprocal Licensing Process
The general process for individuals applying for a reciprocal CPA license includes:
- Verifying that they hold a CPA license from a jurisdiction that makes a similar provision for holders of a license issued by the new jurisdiction
- Verifying whether an ethics course and examination are required for reciprocity
- Passing a criminal background check/getting fingerprinted
- Meeting the jurisdiction’s character and fitness qualifications
- Verifying that they meet all continuing professional education (CPE) requirements for reciprocity
Because CPE requirements often differ from one jurisdiction to another, it is not uncommon for state accountancy boards to require CPAs to meet additional CPE requirements when applying for reciprocal licensure.