DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS  
DIRECTOR'S OFFICE  
ACCOUNTANCY – GENERAL RULES  
(By authority conferred on the department of licensing and regulatory affairs by sections  
205, 308, 721, 725, 726, 728, and 729 of the occupational code, 1980 PA 299, MCL  
339.205, 339.308, 339.721, 339.725, 339.726, 339.728, and 339.729, and Executive  
Reorganization Order Nos. 1991-9, 1996-2, 2003-1, 2008-4, and 2011-4, MCL 338.3501,  
445.2001, 445.2011, 445.2025, and 445.2030)  
PART 1. GENERAL PROVISIONS  
R 338.5101 Definitions.  
Rule 101. (1) As used in these rules:  
(a) "Act" means the occupational code, 1980 PA 299, MCL 339.101 to 339.2677.  
(b) "Audit" or "examination" means an examination applying generally accepted  
auditing standards, including any procedure undertaken to verify or test the  
reasonableness of financial information with a view of expressing an opinion or  
commenting on the fairness of the presentation.  
(c) "Board" means the Michigan board of accountancy created under section 721 of  
the act, MCL 339.721.  
(d) "Continuing education period" means all or part of a year beginning July 1 and  
ending June 30.  
(e) "Continuous instruction" means education time not including breakfast, lunch, or  
dinner periods, coffee breaks, or any other breaks in the program.  
(f) "Disclose" means to provide a written communication from a Certified Public  
Accountant (CPA) or a CPA firm informing the client, prior to making a recommendation  
or referral, that the CPA or CPA firm will receive a commission, referral fee, or  
contingency fee from a third party for recommendations or referrals of products or  
services, or both.  
(g) "Enterprise" means a person, persons, or entity for which an individual licensee, a  
firm licensee, an individual with practice privileges, or an out-of-state firm performs  
professional services.  
(h) "Financial statements" means statements and related footnotes that show financial  
position, results of operations, and cash flows on the basis of generally accepted  
accounting principles or another comprehensive basis of accounting. The term does not  
include incidental financial data included in management advisory services reports to  
support recommendations to a client and does not include tax returns and supporting  
schedules of tax returns.  
(i) "Generally accepted accounting principles" means accounting principles of  
professional conduct, promulgated by the applicable nationally or internationally  
Page 1  
recognized professional standard setting organization, related to individual accounting  
engagements.  
(j) "Generally accepted auditing standards" means the standards of professional  
conduct, promulgated by the applicable nationally or internationally recognized  
professional standard setting organization, related to individual audit engagements.  
(k) “Individual with practice privileges” means an individual who practices in this  
state under section 727a of the act, MCL 339.727a.  
(l) “Nano-learning program” means a tutorial program designed to permit a participant  
to learn a given subject in a 10-minute time frame through the use of electronic media  
and without interaction with a real-time instructor.  
(m) “Out-of-state firm” means a firm that is permitted to provide certain services and  
use the title “CPA firm” without obtaining a Michigan firm license under section 728 of  
the act, MCL 339.728, under the conditions in section 728(4) and (5) of the act, MCL  
339.728.  
(n) "Professional engagement" means an agreement between a client and an individual  
licensee, a firm licensee, an individual with practice privileges, or an out-of-state firm  
relative to the performance of professional services.  
(o) "Professional services" means any services performed or offered to be performed  
by an individual licensee, a firm licensee, an individual with practice privileges, or an  
out-of-state firm for a client in the course of the practice of public accounting, under  
section 720 of the act, MCL 339.720.  
(p) "Qualifying hours" means continuing education hours that satisfy part 3 of these  
rules.  
(2) A term defined in the act has the same meaning when used in these rules.  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2007 AACS; 2013 AACS; 2017  
AACS; 2019 AACS; 2021 MR 9, Eff. May 5, 2021.  
R 338.5102 Standards of professional practice adopted by reference.  
Rule 102. (1) The following standards are adopted by reference:  
(a) The standards issued by the American Institute of CPAs (AICPA), 220 Leigh Farm  
Road, Durham, North Carolina, 27707, set forth in the publication “AICPA Professional  
Standards” updated June 1, 2020, and any statements issued as of the effective date of  
this rule, which are available at a cost of $249.00 from the institute’s website at  
(b) The standards issued by the Public Company Accounting Oversight Board  
(PCAOB), 1666 K Street NW, Washington, District of Columbia, 20006, set forth in the  
publication entitled “PCAOB Standards and Related Rules” 2020 edition, and any  
updates issued as of the effective date of this rule, which are available at no cost from the  
(c) The auditing standards issued by the Government Accountability Office, 441 G.  
St., NW, Washington, District of Columbia, 20548, in the publication entitled  
"Government Auditing Standards 2018 Revision" issued on July 17, 2018, which are  
available  
at  
no  
cost  
on  
the  
Office’s  
website  
at  
Page 2  
(d) The auditing standards issued by the International Auditing and Assurance  
Standards Board (IAASB), 529 5th Avenue, New York, New York, 10017, in the  
publication entitled “2018 Handbook of International Quality Control, Auditing, Review,  
Other Assurance, and Related Pronouncements” issued on December 17, 2018, and any  
related pronouncements issued as of the effective date of this rule, which are available at  
international-quality-control-auditing-review-other-assurance-and-related-services-26.  
(e) The accounting standards issued by the Financial Accounting Standards Board  
(FASB), 401 Merritt 7, P.O. Box 5116, Norwalk, Connecticut, 06856, in the publication  
entitled “FASB Accounting Standards Codification” as of July 20, 2020, and any updates  
published as of the effective date of this rule, which are available at no cost from the  
(f) The accounting standards issued by the Governmental Accounting Standards Board  
(GASB), 407 Merritt 7, P.O. Box 5116, Norwalk, Connecticut, 06856, in the publication  
entitled “GASB Codification” as of June 30, 2019, and any pronouncements published as  
of the effective date of this rule, which are available at a cost of $132.00 from the board’s  
(g) The accounting standards issued by the International Accounting Standards Board,  
30 Cannon Street, London EC4M 6XH, United Kingdom, in the publication entitled  
“2018 International Financial Reporting Standards IFRS® (Red Book)” and any  
pronouncements issued as of the effective date of this rule, which are available at a cost  
of £78.00 from the board’s website at http://www.ifrs.org.  
(h) The United States Securities and Exchange Commission (SEC) rules contained in  
17 CFR chapter 2 and the SEC’s Interpretative Releases and Policy Statements issued as  
of the effective date of this rule. The SEC rules may be obtained free of charge at  
http://www.ecfr.gov. The SEC’s Interpretative Releases and Policy Statements may be  
obtained free of charge at https://www.sec.gov.  
(2) Copies of the standards adopted in this rule are available for inspection and  
distribution at the cost of 10 cents per page from the Department of Licensing and  
Regulatory Affairs, Bureau of Professional Licensing, 611 W. Ottawa Street, P.O. Box  
30670, Lansing, Michigan, 48909.  
(3) A licensee shall satisfy the applicable standards adopted in subrule (1) of this rule.  
History: 2007 AACS; 2013 AACS; 2017 AACS; 2019 AACS; 2021 MR 9, Eff. May 5, 2021.  
R 338.5103 Rescinded.  
History: 1986 AACS; 1996 AACS; 1999 AACS; 2007 AACS; 2013 AACS.  
R 338.5104 Retention of documents  
Rule 104. (1) With the exception of documents related to a peer review, all individual  
licensees, firm licensees, individuals with practice privileges, and out-of-state firms shall  
retain sufficient documentation, in any form, with regard to services performed while  
engaged in the practice of public accounting, as well as evidence obtained and  
conclusions reached, for a period of not less than 5 years.  
Page 3  
(2) Documents related to a peer review shall be retained in accordance with the AICPA's  
professional standards and retention policies pursuant to R 338.5102(1)(a) or until final  
adjudication of a complaint related to a peer review, whichever is later.  
(3) Documentation shall be consistent with that required by professional standards or  
promulgated by the applicable nationally or internationally recognized professional  
standards setting organizations.  
History: 2007 AACS; 2013 AACS.  
R 338.5105 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2003 AACS; 2013 AACS.  
R 338.5110 Rescinded.  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2013 AACS; 2021 MR 9, Eff. May 5,  
2021.  
PART 2. LICENSURE REQUIREMENTS  
R 338.5110a Uniform CPA exam procedures.  
Rule 110a. The following procedures apply to the uniform CPA exam:  
(a) Applicants may take the required exam sections individually and in any order.  
(b) Applicants shall pass all sections of the exam within a rolling 18-month period  
beginning on the date that the first section is passed. If all sections are not passed within  
the rolling 18-month period, then credit for any section passed outside the 18-month  
period expires and must be retaken.  
(c) The department may extend the rolling 18-month period under subdivision (b) of  
this rule due to the sickness of the candidate or a member of the candidate’s immediate  
family if substantiated by a doctor’s certificate or if the candidate provides the  
department with proof of a death in the candidate’s immediate family, temporary military  
service, or another good reason acceptable to the department. A candidate shall make a  
request for an extension within 90 days of the date of the exam. If extended, an  
applicant’s exam does not count as a failure to write the exam.  
(d) The department or the entity contracted with the department to administer the exam  
may permit a candidate to sit for the exam in another state if the candidate complies with  
all the requirements for sitting for the exam under these rules.  
(e) The department grants a candidate credit for exam grades of 75 or higher earned in  
another state if the candidate satisfies the educational requirements to sit for the exam and  
if the board determines the exam was equivalent to the exam provided by the department.  
(f) An applicant may retake an exam section once the applicant’s grade for any  
previous attempt of the same exam section has been released.  
Page 4  
History: 2003 AACS; 2013 AACS; 2021 MR 9, Eff. May 5, 2021.  
R 338.5111 Exam scores.  
Rule 111. (1) The minimum passing grade for each subject is 75.  
(2) The department shall notify each candidate of his or her grades within a reasonable  
time, but not later than 120 days after completion of the exam.  
(3) A candidate shall appeal the grading of any paper to the department, in writing,  
within 30 days after grades are released.  
History: 1986 AACS; 1996 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5112 Rescinded.  
History: 1986 AACS; 1998-2000 AACS; 2013 AACS; 2021 MR 9, Eff. May 5, 2021.  
R 338.5114 Rescinded.  
History: 1998-2000 AACS; 2007 AACS; 2013 AACS.  
R 338.5115  
Educational requirements for uniform CPA exam; approved  
educational institutions; adoption of accreditation standards by reference.  
Rule 115. (1) To satisfy section 725(1)(b) and (2) of the act, MCL 339.725, an  
individual shall supply proof of both of the following:  
(a) Completion of a curriculum required for a baccalaureate degree consisting of not  
less than 120 semester hours at a higher education institution approved under subrule (3)  
of this rule or considered substantially equivalent under subrule (4) of this rule.  
(b) Completion of a concentration in accounting at a higher education institution  
approved under subrule (3) of this rule or considered substantially equivalent under  
subrule (4) of this rule, that includes all the accounting and general business subjects  
under subrule (2) of this rule.  
(2) A concentration in accounting must include all the following accounting and  
general business subjects:  
(a) Auditing: 3 semester hours.  
(b) Twenty-four semester hours of general business subjects, other than accounting,  
that may include study in any of the following subjects:  
(i) Business communications.  
(ii) Business ethics.  
(iii) Business law.  
(iv) Economics.  
(v) Finance.  
(vi) Management.  
(vii) Marketing.  
(viii) Information systems or technology.  
Page 5  
(ix) Quantitative methods.  
(x) Statistics.  
(xi) Other subjects approved by the department.  
(c) Twenty-one semester hours of accounting principles that must include study in  
each of the following areas:  
(i) Financial accounting and accounting theory.  
(ii) Managerial accounting, including cost accounting.  
(iii) Accounting systems and controls.  
(iv) Taxation.  
(v) Governmental/fund accounting.  
(3) The board adopts by reference the procedures and criteria for recognizing  
accrediting agencies of the United States Department of Education, effective July 1,  
2010, as contained in 34 CFR part 602, and the policies and procedures for recognition of  
accrediting organizations of the Council of Higher Education Accreditation (CHEA),  
effective June 28, 2019. The federal recognition criteria may be obtained from the  
United States Department of Education, Office of Postsecondary Education, 400  
Maryland Avenue, SW, Washington, District of Columbia, 20202 and are available at no  
cost at http://www.ecfr.gov. The policies and procedures may be obtained from CHEA,  
One Dupont Circle NW, Suite 510, Washington, DC 20036 and are available at no cost at  
(4) An individual who attended an unaccredited higher education institution shall  
establish that he or she has completed educational requirements at a higher education  
institution that satisfies accreditation requirements substantially equivalent to those  
recognized in subrule (3) of this rule by providing a credential evaluation completed by  
either the National Association of State Boards of Accountancy (NASBA) or a credential  
evaluation organization that is a current member organization of the National Association  
of Credential Evaluation Services (NACES).  
(5) Copies of the standards and criteria adopted by reference in this rule are available  
for inspection and distribution at the cost of 10 cents per page from the Department of  
Licensing and Regulatory Affairs, Bureau of Professional Licensing, 611 W. Ottawa  
Street, P.O. Box 30670, Lansing, Michigan, 48909.  
History: 1979 AC; 1982 AACS; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2013 AACS; 2017 AACS;  
2019 AACS; 2021 MR 9, Eff. May 5, 2021.  
R 338.5116 Educational requirements for certificate of certified public accountant.  
Rule 116. (1) To satisfy section 725(1)(e) of the act, MCL 339.725, an individual shall  
supply proof of all the following to the department:  
(a) Completion of at least 150 semester hours at a higher education institution  
approved under R 338.5115(3) or considered substantially equivalent under R  
338.5115(4).  
(b) Completion of a baccalaureate degree or higher degree from a higher education  
institution approved under R 338.5115(3) or considered substantially equivalent under R  
338.5115(4).  
Page 6  
(c) Completion of a concentration in accounting under R 338.5115(1)(b) and R  
338.5115(2) at a higher education institution approved under R 338.5113(3) or  
considered substantially equivalent under R 338.5115(4).  
(2) A person may earn credit only once for an accounting or general business topic. If  
the department determines that 2 courses are duplicative, then only the semester hours of  
the first course are counted toward the semester hour requirement.  
History: 2013 AACS; 2019 AACS; 2021 MR 9, Eff. May 5, 2021.  
R 338.5117  
Certificate of certified public accountant; qualifying experience  
requirement.  
Rule 117. (1) An applicant applying for a CPA certificate shall have obtained not less  
than 2,000 hours of qualifying experience within a period of not less than 1 calendar year  
nor more than 5 calendar years.  
(2) The department shall grant full credit for qualifying experience earned during a  
college or university internship, including the internships for which educational credit is  
provided.  
(3) The department shall regard instruction as qualifying experience, if the applicant has  
completed not less than 4 academic semesters of an academic appointment in accounting  
at an institution recognized by the department. An instructor who has an academic  
appointment in accounting shall teach, as the principal instructor, not less than 6 credit  
hours per semester of accounting subjects above the elementary level.  
History: 2013 AACS.  
R 338.5120 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5125 Rescinded.  
History: 1979 AC; 1986 AACS; 1997 AACS.  
R 338.5130 Rescinded.  
History: 1979 AC; 1998-2000 AACS.  
R 338.5135 Rescinded.  
History: 1979 AC; 1986 AACS; 1997 AACS.  
R 338.5139 Practice privilege.  
Page 7  
Rule 139. An individual shall not, as a condition of qualification for the practice  
privilege granted under MCL 339.727a, be required to comply with the continuing  
professional education requirements of this state provided that the individual is in  
compliance with the continuing professional education requirements of the state of the  
individual’s principal place of business.  
History: 2013 AACS.  
R 338.5140 Permit for temporary practice.  
Rule 140. (1) An accountant who does not qualify for practice privileges under MCL  
339.727a nor hold a license to practice public accounting in this state shall obtain a  
permit and pay the appropriate fee for each engagement in this state by this accountant, or  
on behalf of his or her firm, who does not hold a license to practice public accountancy in  
this state. The applicant shall hold a license as a certified public accountant of another  
state, or hold a title from a foreign country, recognized by the board as comparable to the  
Michigan certificate of certified public accountant and shall be practicing public  
accountancy under the certificate or license in the grantor state or country.  
(2) If approved by the department, the term of the permit shall begin on the date  
approved unless otherwise specified and shall be for a specified period, but shall not be  
for more than 1 year.  
(3) The temporary practice shall be performed by, or under the direct supervision of, a  
licensed certified public accountant, an individual with practice privileges under to MCL  
339.727a or the holder of a title from a foreign country who is recognized under subrule  
(1) of this rule.  
(4) A temporary permit is not required if the work relates to a Michigan-based division  
or subsidiary of an entity, if the parent entity is located in another state or foreign country  
and is a client of the certified public accountant, firm, or foreign accountant, and if a  
separate presentation of financial statements with a related independent auditor's report  
or review report, or an attestation regarding the reliability of a representation or estimate  
is not made for the division or subsidiary on a stand-alone basis.  
(5) A temporary permit is not required if the work is to be performed through the  
applicant's employer who presently holds the license to practice public accountancy in  
this state.  
(6) A temporary permit issued to an accountant shall also constitute a temporary permit  
for his or her firm, if his or her firm is not presently licensed in this state.  
(7) If another jurisdiction charges a fee for providing an affidavit or certificate of  
professional standing for determining whether the applicant is qualified to practice public  
accountancy temporarily in this state, then the applicant shall pay the fee.  
History: 1979 AC; 1998-2000 AACS; 2007 AACS; 2013 AACS.  
R 338.5145 Rescinded.  
History: 1979 AC; 1982 AACS; 1986 AACS; 1996 AACS; 1998-2000 AACS;2007 AACS; 2013 AACS.  
Page 8  
R 338.5147 Rescinded.  
History: 1996 AACS; 1998-2000 AACS.  
R 338.5150 Rescinded.  
History: 1979 AC; 1996 AACS; 1998-2000 AACS.  
R 338.5155 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS.  
R 338.5160 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5165 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5170 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5201 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5205 Rescinded.  
History: 1979 AC; 1986 AACS.  
PART 3. CONTINUING EDUCATION  
R 338.5210 License renewals; continuing education requirements; applicability;  
continuing education waiver; reciprocity.  
Rule 210. (1) This part applies to applications for renewal of an accountancy license  
under sections 411 and 729 of the act, MCL 339.411 and 339.729. An applicant for  
Page 9  
renewal shall submit the required fee and a completed application on a form provided by  
the department. Both of the following apply:  
(a) Under section 729(1) of the act, MCL 339.729, an applicant for renewal who is a  
nonresident licensee as defined under section 720(1)(g) of the act, MCL 339.720, is  
considered to have met the requirements under this part if he or she satisfies all of the  
following requirements:  
(i) Submits the required fee and a completed application on a form provided by the  
department.  
(ii) The state in which his or her principal place of business is located requires  
continuing education for renewal of that state’s accountancy license.  
(iii) Has met the continuing education requirements of the state in which his or her  
principal place of business is located.  
(b) If audited, the applicant shall provide a copy of the license that was renewed by the  
state in which his or her principal place of business is located.  
(2) Submission of an application for renewal constitutes the applicant’s certification of  
compliance with the requirements of this rule. Both of the following apply:  
(a) An applicant shall retain documentation required by R 338.5215 as proof of  
satisfying the requirements under this rule for 4 years from the date of applying for  
license renewal.  
(b) A licensee is subject to audit under this part and may be required to submit the  
documentation as described by R 338.5215 upon request of the department.  
(3) A request for a continuing education waiver under section 204(2) of the act, MCL  
339.204, must be received by the department before the expiration date of the license.  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2007 AACS; 2013 AACS; 2019  
AACS; 2021 MR 9, Eff. May 5, 2021.  
R 338.5211 Renewal of license with insufficient qualifying hours permitted under  
certain circumstances; waiver of requirement for additional hours.  
Rule 211. (1) A licensee who does not earn sufficient qualifying hours during the  
continuing education period may be allowed to renew a license upon reporting 80  
qualifying hours and an additional 4 hours of continuing education credit for each  
month of time needed to remove the deficiency.The additional 4 hours of continuing  
education credit for each month of time needed to remove the deficiency shall not apply  
toward the qualifying hours of continuing education credit required in a continuing  
education period for the renewal of a license.  
(2) The department may waive the requirement for additional hours upon a showing  
by the licensee that the additional hours would present an undue hardship on the  
licensee.  
History: 1986 AACS; 1996 AACS; 1998-2000 AACS.  
R 338.5215 Acceptable continuing education; requirements; limitations.  
Rule 215. (1) The continuing education hours required for renewal must satisfy the  
following requirements:  
Page 10  
Acceptable Continuing Education  
Activity and proof of completion  
Number of continuing  
education hours earned  
for the Activity  
(a) Attendance in a group program that satisfies all the Fifty  
following requirements: continuous  
equals  
minutes  
of  
instruction  
continuing  
1
The subject matter of the program complies with R education hour.  
338.5255.  
The program is conducted by an instructor or Additional  
credit  
is  
discussion leader whose background, training, granted after the first 50  
education, or experience makes it appropriate for him minutes for continuous  
or her to lead a discussion on the subject matter.  
instruction  
in  
the  
The sponsor of the program takes individual following amounts:  
attendance.  
The sponsor of the program issues to each attendee a One-half  
program outline and a written certification of the credit)  
credit  
for  
(0.5  
every  
attendee’s hours of attendance.  
additional 25 minutes.  
The sponsor of the program maintains written One-fifth  
records of individual attendance and the program credit)  
credit  
for  
(0.2  
every  
outline for 4 years.  
additional 10 minutes.  
If audited, a licensee shall submit a copy of a letter or  
certificate of completion showing the licensee’s  
name, total continuing education hours earned,  
sponsor name and contact information, course title,  
course field of study, date offered or completed, and  
type of instruction or delivery method used.  
(b) Completion of an individual nano-learning program Credit is awarded as 1/5  
that satisfies all the following requirements: credit (0.2 credit) for each  
nano-learning program  
The subject matter of the program complies with R completed.  
338.5255.  
The program is an educational course designed for A nano-learning course  
nano-learning delivery. cannot be combined with  
The program uses instructional methods that define a another nano-learning  
minimum of 1 learning objective.  
course.  
The program guides the participant through a  
program of learning and provides proof of a A combined maximum of  
participant’s satisfactory completion of the program. 20 continuing education  
The sponsor requires the participant to successfully hours may be earned  
complete a qualified assessment with a passing grade under this activity and  
of 100% before issuing credit for the course.  
activity (f) during each  
The sponsor of the program issues the participants a continuing  
written certification of the participants’ completion period.  
of the program and a program outline.  
education  
Page 11  
The sponsor of the program maintains written  
records of the participant’s completion of the  
program and the program outline for 4 years.  
If audited, the licensee shall submit a copy of a letter  
or certificate of completion provided by the program  
sponsor verifying the licensee’s name, number of  
continuing education hours earned, sponsor name  
and contact information, course title, course field of  
study, date completed, and type of instruction or  
delivery method used.  
(c) Passing a noncredit academic course that satisfies Each 50 minutes of  
both of the following requirements:  
continuous  
equals  
instruction  
continuing  
1
The subject matter of the course complies with R education hour.  
338.5255.  
The course is offered by an educational institution  
that complies with R 338.5115.  
If audited, the licensee shall submit a letter from the  
institution confirming the name and course number  
of the course completed, number of classroom hours  
attended, and the date of satisfactory course  
completion.  
(d) Passing a for-credit academic course that satisfies Fifteen  
continuing  
both of the following requirements:  
education  
hours  
are  
granted for each academic  
The subject matter of the course complies with R credit hour.  
338.5255.  
The course is offered by an educational institution  
that complies with R 338.5115.  
If audited, the licensee shall submit a copy of an  
official transcript or a letter from the institution  
confirming the name and course number of the  
course completed, credit hours earned, and date of  
satisfactory course completion.  
(e) Classroom work as a teacher, instructor, speaker, or Three  
lecturer that is part of an academic course of which education  
continuing  
hours are  
the subject matter complies with R 338.5255 and is granted for every 50  
offered at an educational institution that complies minutes of continuous  
with R 338.5115 or conducting a group program that instruction.  
satisfies the requirements under activity (a) as a  
teacher, instructor, lecturer, speaker, or seminar A maximum of 20  
discussion leader.  
continuing  
education  
hours may be earned  
Page 12  
If audited, the licensee shall submit a copy of the during each continuing  
confirmation letter provided by the program sponsor education period.  
or the institution verifying the licensee’s name,  
number of hours of classroom work or hours spent  
conducting the group program, course title, course  
field of study, and dates of the presentation or  
instruction.  
(f) Completion of an individual self-study program that Twenty-five minutes of  
satisfies all the following requirements:  
continuous  
equals ½ (0.5 credit) of 1  
The subject matter of the program complies with R continuing education  
instruction  
338.5255.  
hour.  
The program is an educational course designed for  
self-study.  
One-fifth (0.2 credit) of 1  
The sponsor of the program issues the participants a continuing education hour  
written certification of the participant’s completion is granted for every  
of the program and a program outline.  
The sponsor of the program maintains written continuous  
records of the participant’s completion of the after the first 25 minutes  
program and the program outline for 4 years. of continuous instruction.  
additional 10 minutes of  
instruction  
If audited, the licensee shall submit a copy of a letter A combined maximum of  
or certificate of completion provided by the program 20 continuing education  
sponsor verifying the licensee’s name, number of hours may be earned  
continuing education hours earned, sponsor name under this activity and  
and contact information, course title, course field of activity (b) during each  
study, date completed, and type of instruction or continuing  
delivery method used. period.  
(g) A course in professional ethics that complies with the Continuing  
education  
education  
requirements of activity (a), (b), (c), (d), (e), or (f) is hours are granted in an  
approved if the subject matter of the course complies amount allowed under the  
with R 338.5255(2).  
type of activity for which  
the course qualifies.  
If audited, the licensee shall submit a copy of a letter  
or certificate of completion provided by the program  
sponsor verifying the licensee’s name, number of  
continuing education hours earned, sponsor name  
and contact information, course title, course field of  
study, date completed, and type of instruction or  
delivery method used.  
(h) Completion of a course in Michigan statutes and Fifty  
minutes  
of  
administrative rules applicable to public accountancy continuous  
instruction  
continuing  
that satisfies all the following requirements:  
equals  
1
education hour.  
The content of the course is created by the Michigan  
Association of Certified Public Accountants.  
Page 13  
The course provider issues the participants a written  
certification of the participant’s completion of the  
course and a course outline.  
The sponsor of the program maintains written  
records of the participant’s completion of the course  
and the course outline for 4 years.  
If audited, the licensee shall submit a copy of a letter  
or certificate of completion provided by the program  
sponsor verifying the licensee’s name, number of  
continuing education hours earned, sponsor name  
and contact information, course title, course field of  
study, date completed, and type of instruction or  
delivery method used.  
(2) Continuing education hours are not granted for a program or activity that has  
substantially the same content of a program or activity for which the applicant has  
already earned continuing education hours during the continuing education period.  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2003 AACS; 2019 AACS; 2021 MR 9,  
Eff. May 5, 2021.  
R 338.5216 Rescinded.  
History: 1986 AACS; 1996 AACS; 1998-2000 AACS; 2019 AACS.  
R 338.5217 Rescinded.  
History: 1986 AACS; 1996 AACS; 1998-2000 AACS; 2019 AACS.  
R 338.5218 Rescinded.  
History: 1986 AACS; 1996 AACS; 1998-2000 AACS; 2019 AACS.  
R 338.5220 Rescinded.  
History: 1979 AC; 1986 AACS; 1996 AACS.  
R 338.5221 Rescinded.  
History: 1986 AACS; 1998-2000 AACS.  
R 338.5225 Rescinded.  
Page 14  
History: 1979 AC; 1986 AACS; 1997 AACS.  
R 338.5230 Relicensure; continuing education.  
Rule 230. (1) An applicant for relicensure whose license has lapsed for less than 3  
years after the expiration date of the last license may be relicensed under section 411(3)  
of the act, MCL 339.411(3), if the applicant satisfies both of the following requirements:  
(a) Submits the required fee and a completed application on a form provided by the  
department.  
(b) Submits proof to the department of the completion of 40 hours of continuing  
education within the 12 months immediately preceding the date of filing the relicensure  
application. However, if the continuing education hours submitted with the application  
are deficient, the application will be held by the department and the applicant shall  
provide proof of completing the deficient hours within 1 year of the date of filing the  
relicensure application. The 40 hours must satisfy all the following requirements:  
(i) Satisfy the requirements of R 338.5215.  
(ii) Eight of the 40 hours are in auditing and accounting.  
(iii) Two of the 40 hours are in professional ethics.  
(iv) One of the 2 hours is in professional ethics that satisfies the requirements under  
R 338.5215(1)(h).  
(2) An applicant whose license has been lapsed for 3 or more years after the expiration  
date of the last license may be relicensed under section 411(4) of the act, MCL  
339.411(4), if the applicant satisfies all of the following requirements:  
(a) Submits the required fee and a completed application on a form provided by the  
department.  
(b) Establishes that he or she holds a valid and unrevoked certificate as a certified  
public accountant that was issued under section 725 or 726 of the act, MCL 339.725 and  
339.726.  
(c) Submits proof to the department of the completion of 40 hours of continuing  
education within the 12 months immediately preceding the date of filing the relicensure  
application. However, if the continuing education hours submitted with the application  
are deficient, the applicant has 1 year from the date of filing the application to provide  
proof of completing the deficient hours. The 40 hours must satisfy all the following  
requirements:  
(i) Satisfy the requirements of R 338.5215.  
(ii) Eight of the 40 hours are in auditing and accounting.  
(iii) Two of the 40 hours are in professional ethics.  
(iv) One of the 2 hours is in professional ethics that satisfies the requirements under  
R 338.5215(1)(h).  
(3) The continuing education hours required for the continuing education period of the  
year in which the license is granted under this rule are prorated starting with the month  
following the date of relicensure.  
(4) The department shall not calculate the period of a lapsed license based on a current  
or lapsed registration. A registrant whose license has lapsed for less than 3 years shall  
satisfy the requirements under subrule (1) of this rule. A registrant whose license has  
lapsed for 3 years or more shall satisfy the requirements under subrule (2) of this rule.  
Page 15  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2003 AACS; 2013 AACS; 2019  
AACS; 2021 MR 9, Eff. May 5, 2021.  
R 338.5235 Rescinded.  
History: 1979 AC; 1986 AACS; 1997 AACS.  
R 338.5240 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS; 2019 AACS.  
R 338.5245 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5250 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5255 Qualifying continuing education subjects.  
Rule 255. (1) Subjects qualifying for continuing education include any of the  
following:  
(a) Accounting.  
(b) Auditing.  
(c) Management advisory services.  
(d) Information technology.  
(e) Mathematics, statistics, probability, and quantitative application to business.  
(f) Economics.  
(g) Finance.  
(h) Business law.  
(i) Business management.  
(j) Professional ethics for certified public accountants.  
(k) Taxation.  
(l) Financial advisory services.  
(m) Business valuations.  
(n) Any other subjects which contribute to the professional competency of a licensee  
and for which the responsibility for compliance rests solely with the licensure applicant  
or licensee.  
(2) Subjects that qualify for continuing education in the study of professional ethics  
include any of the following:  
(a) Behavioral ethics in any of the following areas:  
Page 16  
(i) Ethical reasoning.  
(ii) Ethical philosophy.  
(iii) Ethics enforcement.  
(iv) Ethical practice in business.  
(v) International ethical professional standards.  
(b) Technical ethics in the following areas:  
(i) Business transactions with clients.  
(ii) Competence.  
(iii) Conflict of interest.  
(iv) Contingent fees, commissions, and other considerations.  
(v) Discreditable acts.  
(vi) General and professional standards.  
(vii) Independence.  
(viii) Integrity and objectivity.  
(ix) Malpractice  
(x) Professional conduct.  
(xi) Public interest and responsibilities.  
(xii) State rules and regulations.  
(c) Any other subject in the study of professional ethics that contributes to the  
professional competency of a licensee and for which the responsibility for compliance  
rests solely with the licensure applicant or licensee.  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2013 AACS; 2019 AACS.  
R 338.5260 Rescinded.  
History: 1979 AC; 1986 AACS; 2013 AACS.  
R 338.5265 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5270 Rescinded.  
History: 1979 AC; 1986 AACS; 2013 AACS.  
R 338.5275 Rescinded.  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS.  
R 338.5280 Rescinded.  
History: 1979 AC; 1986 AACS.  
Page 17  
R 338.5285 Rescinded.  
History: 1979 AC; 1986 AACS; 1996 AACS.  
R 338.5301 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5303 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5304 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5305 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5309 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5311 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5313 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5315 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5317 Rescinded.  
Page 18  
History: 1979 AC; 1996 AACS.  
R 338.5319 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5321 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5323 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5325 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5327 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5329 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5331 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5333 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5335 Rescinded.  
History: 1979 AC; 1996 AACS.  
Page 19  
R 338.5337 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5339 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5341 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5343 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5345 Rescinded.  
History: 1979 AC; 1998-2000 AACS.  
R 338.5347 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5349 Rescinded.  
History: 1979 AC; 1996 AACS.  
R 338.5351 Rescinded.  
History: 1979 AC; 1996 AACS.  
PART 4. PROFESSIONAL CONDUCT  
R 338.5401 Responsibility for conduct of supervised persons.  
Rule 401. (1) The department may hold a an individual licensee, a firm licensee, an  
individual with practice privileges, or an out-of-state firm responsible for compliance  
with the rules of professional conduct by all persons under their supervision. If the  
licensee is a firm, then the department shall hold the firm, and shall hold an out-of-state  
Page 20  
firm, responsible for compliance with the rules of professional conduct by all of its  
employees.  
(2) An individual licensee, a firm licensee, and individual with practice privileges, or an  
out-of-state firm, shall not permit others to carry out on its behalf acts which, if carried  
out by the individual licensee, firm licensee, individual with practice privileges, or out-  
of-state firm, would constitute a violation of the rules of professional conduct.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5405 Independence rule; adoption by reference.  
Rule 405. An individual licensee, a firm licensee, an individual with practice  
privileges, or an out-of-state firm may express an opinion on financial statements of an  
enterprise only if the individual licensee, firm licensee, individual with practice  
privileges, or out of-state firm is independent from the enterprise. The standards adopted  
in R 338.5102(1) shall be used to determine if the individual or firm is independent from  
the enterprise.  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2003 AACS; 2007 AACS; 2013 AACS;  
2017 AACS.  
R 338.5410 Rescinded.  
History: 1979 AC; 1986 AACS; 1997 AACS.  
R 338.5415 Rescinded.  
History: 1979 AC; 1986 AACS; 1997 AACS.  
R 338.5420 Rescinded.  
History: 1979 AC; 1986 AACS; 1997 AACS.  
R 338.5425 Rescinded.  
History: 1979 AC; 1986 AACS; 1997 AACS.  
R 338.5430 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS.  
R 338.5435 Licensee competence required to undertake professional engagement.  
Page 21  
Rule 435. An individual licensee, a firm licensee, an individual with practice privileges,  
or an out-of-state firm shall not undertake a professional engagement that the individual  
licensee, firm licensee, individual with practice privileges, or out-of-state firm cannot  
competently complete.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5440 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS.  
R 338.5445 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS.  
R 338.5446 Rescinded.  
History: 1986 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5450 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS.  
R 338.5460 Contingent fees.  
Rule 460. (1) As provided in section 730 of the act, a contingent fee is a fee paid by a  
client to an individual licensee, a firm licensee, an individual with practice privileges, or  
an out-of-state firm.  
(2) An individual licensee, firm licensee, an individual with practice privileges, or an  
out-of-state firm who is paid or expects to be paid a contingent fee by a client shall  
disclose that fact to the client.  
(3) As used in section 730(4) of the act, the term "tax matters" relates to the preparation  
of an original or amended tax return or claim for tax refund and includes giving advice on  
events that occurred before the time the advice is given if the advice is directly relevant to  
determining the existence, character, or amount of a schedule, entry, or other portion of a  
return of claim for refund.  
(4) As provided in section 730(4) of the act, a fee is considered determined, based on the  
findings of a governmental agency, if the individual licensee, firm licensee, individual  
with practice privileges, or out-of-state firm can demonstrate a reasonable expectation at  
the time of a fee arrangement of substantive consideration by the agency with respect to  
the client. An expectation of substantive consideration is deemed not reasonable for  
preparation of original tax returns.  
Page 22  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5465 Acts constituting discreditable conduct.  
Rule 465. Any of the following acts by an individual licensee, firm licensee, an  
individual with practice privileges, or an out-of-state firm, constitutes conduct that is  
discreditable to the accounting profession:  
(a) Using deceptive representations in connection with services performed.  
(b) Representing that services are of a particular standard when they are not.  
(c) Failing to perform, on a timely basis, services in accordance with the conditions,  
terms, or prerequisites of a public communication or any quotation.  
(d) Misrepresenting facts or failing to disclose relevant facts.  
(e) Creating false or unjustified expectations of favorable results.  
(f) Implying abilities not supported by valid educational or professional attainments or  
licensing recognition.  
(g) Implying the ability to influence improperly any court, tribunal, or other public body  
or official.  
(h) Making any other representation or implication that is false, deceptive, or  
misleading.  
(i) Employing or engaging a person to perform a discreditable act.  
(j) Engaging in a trade practice prohibited by law.  
(k) Retaining documents constituting the original books and records of a client after a  
demand has been made for their return.  
(l) Failing to respond, within a reasonable time, to inquiries of the board or its  
authorized representatives relative to the administration of the act.  
(m) Providing false or misleading information on the qualifying experience of an  
applicant for certified public accountant.  
(n) Stating or implying that the individual licensee, firm licensee, individual with  
practice privileges, or out-of-state firm has received formal recognition as a specialist in  
any aspect of the practice of public accountancy if the individual licensee, firm licensee,  
individual with practice privileges, or out-of-state firm has not received the recognition.  
(o) Representing that professional services can or will be competently performed for a  
stated fee when this is not the case, or making representations with respect to fees for  
professional services that do not disclose all variables which may reasonably be expected  
to affect the fees that will in fact be charged.  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5470 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5475 Payment or acceptance of commissions; "commission" defined.  
Rule 475. (1) As used in section 731 of the act, "commission" means any remuneration  
paid to an individual licensee, a firm licensee, an individual with practice privileges, or  
Page 23  
an out-of-state firm by a third party in connection with a recommendation or referral of a  
person to the third party.  
(2) As provided in section 731(3) of the act, a referral fee is not a commission when  
received or paid by an individual licensee, a firm licensee, an individual with practice  
privileges, or an out-of-state firm for recommending or referring a client to another  
individual licensee, firm licensee, individual with practice privileges, or out-of-state firm  
for a service involving the practice of public accounting.  
(3) An individual licensee, a firm licensee, an individual with practice privileges, or an  
out-of-state firm who is paid or expects to be paid a commission or a referral fee shall  
disclose that fact to the client.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5480 Rescinded.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS.  
R 338.5501 Peer review.  
Rule 501. (1) Each firm or sole practitioner required to participate in a peer review  
program, pursuant to MCL 339.729(2), shall enroll in the program of a qualified  
sponsoring organization within 1 year of the earlier of the following:  
(a) Its initial licensing date.  
(b) The performance of services that require a peer review.  
(2) Proof of a peer review shall not be required to be submitted to the department until  
the second renewal following initial licensure or the performance of services requiring a  
peer review.  
(3) The department shall accept, as proof of compliance with MCL 339.729(2), the  
electronic submission of information from the facilitated state board access (FSBA)  
website.  
(4) Qualified sponsoring organizations shall include the center for public company  
audit firms (CPCAF) peer review program, the American institute of certified public  
accountants (AICPA) peer review program, national conference of CPA practitioners  
(NCCPAP) peer review program, and such other entities that adhere to the peer review  
standards defined in R 338.5102(1)(a) as determined by the board. With respect to an  
out-of-state firm required to obtain a license under MCL 339.728(1)(b), a peer review  
sponsoring organization approved by another state in which that firm is licensed is  
presumed to be qualified in this state, with respect to that firm.  
(5) A licensee subject to peer review shall not be required to become a member of any  
sponsoring organization.  
(6) Out-of-state firms required to obtain a peer review under MCL 339.728(5) may, in  
lieu of enrolling in a program sponsored by an organization described in subrule (3) of  
this rule, comply with the peer review requirement applicable in the state where that firm  
is licensed, proof of which shall be furnished to the department upon the department’s  
request.  
Page 24  
History: 2007 AACS; 2013 AACS.  
R 338.5503 Peer review standards; change in sponsoring organization; deficient  
peer review reports; documentation.  
Rule 503. (1) If a firm is merged, otherwise combined, dissolved, or separated, the  
sponsoring organization shall determine which firm is considered the succeeding firm.  
The succeeding firm shall retain its peer review status and the review due date.  
(2) A firm choosing to change to another sponsoring organization may do so provided  
that the firm authorizes the previous sponsoring organization to communicate to the  
succeeding sponsoring organization any outstanding corrective actions related to the  
firm's most recent review.  
(3) The department may rely on a fail peer review report or a second consecutive pass  
with deficiencies peer review report as prima facie evidence of a violation of professional  
standards.  
(4) Each peer review and reviewer must comply with the applicable review standards in  
place at the time of the review. The following apply:  
(a) Documents related to a peer review shall be retained in accordance with the AICPA's  
retention policies pursuant to R 338.5102(1)(a), or until final adjudication of a complaint  
related to a peer review, whichever is later.  
(b) The documents described in subdivision (a) of this subrule shall be available for  
inspection by the department during regular business hours with reasonable notice.  
History: 2007 AACS; 2013 AACS.  
Page 25