“Louisiana Accountancy Act” of 1999

Information About the “Louisiana Accountancy Act” (renactment of 1999)

The legislative purpose and findings for the LA Accountancy Act include:

  • the promotion of reliability of information used in financial transactions, and in the accounting for and assessment of the financial status and performance of commercial and non-commercial enterprises;
  • persons and firms professing special competence in accountancy or offering assurance on the reliability of the fairness of presentation of such information must demonstrate they are qualified and show that they have maintained their qualifications;
  • deceptive titles which tend to deceive the public are to be prohibited;
  • the conduct of certified or licensed persons and firms are to be regulated in all aspects of professional work by a public authority; and,
  • the State Board of CPAs is the public authority established to regulate CPAs and enforce the accountancy statutes.

The Act changed many of the details of the former statutes.  Many of the changes were made in response to actual and perceived changes in the marketplace for accounting services, assessments of market demand for traditional versus new service opportunities, how CPAs can and are providing services, the mobility of CPAs, competition to CPAs from new sources, the expansion of communication and technological media available to conduct business, and trends in judicial decisions over the last several years.

The effects on CPAs and those who were unlicensed registrants at the time the Act passed was that:

  • a CPA, who held a Louisiana “license” under prior law at the effective date of the new Act, was deemed to have met the requirements under the new Act and may use the designation “certified public accountant” or “CPA”. Such licensees must continue to renew the certificate annually and comply with CPE in order to actively maintain the certificate.
  • a registrant, who did not hold a license under prior law at the effective date of the Act, must apply to the Board and show that he or she has met the new experience requirements before using the designation “certified public accountant” or “CPA”. Until such time, he or she may use the term “CPA inactive” with his or her name, if not offering or performing professional services to the public as a “CPA” or “CPA inactive”

In the case of current candidates who pass the CPA exam, the CPA certificate will be issued by the Board only afterthe qualifying experience has been satisfied.  This is because having an active certificate is in essence the “license”.  (Previously, the certificate was issued to show that a person had passed the CPA exam and did not provide the person with permission to practice as a CPA.  Such candidates became what were formerly referred to as “unlicensed” CPAs.  Successful exam candidates do not have any “title” or credential under the law. They first must meet the experience requirement and will have to apply for an active CPA certificate.)

Other significant changes brought about by the Act are:

  • allowance for the acceptance of commissions and contingent fees in certain circumstances (essentially are permissible with respect to services other than those where independence is required, if disclosed to the client in advance in writing)
  • liberalizing CPA firm ownership requirements (up to 49% non-CPA ownership)
  • the necessity of firm “permits” but only for those firms which either choose to use the CPA designation with the firm name or choose to offer attest services (a sole proprietor/individual CPA/part-time practitioner who performs or offers attest work must also first obtain a “firm” permit)
  • provisions for the Board to grant licensing and/or practice rights in Louisiana for CPAs from other states who became qualified for licensing in a manner similar to Louisiana CPAs, i.e., on a “substantially equivalent” basis to Louisiana’s regulatory requirements.