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) "Board" means the Michigan board of accountancy created under section 721 of the  
code, MCL 339.721.  
(b) "Code" means the occupational code, 1980 PA 299, MCL 339.101 to 339.2677.  
(c) "Continuing education period" means all or part of a year beginning July 1 and  
ending June 30.  
(d) "Continuous instruction" means education time not including breakfast, lunch, or  
dinner periods, coffee breaks, or any other breaks in the program.  
(e) "Disclose" means to provide a written communication from a Certified Public  
Accountant (CPA) or a CPA firm informing the client, before 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.  
(f) "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.  
(g) "Financial statements" means statements and related footnotes that show financial  
position, results of operations, and cash flows based on 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.  
(h) "Generally accepted accounting principles" means accounting principles issued by  
the applicable nationally or internationally recognized professional standard setting  
organization related to individual accounting engagements.  
(i) "Generally accepted auditing standards" means the standards of professional  
conduct, issued by the applicable nationally or internationally recognized professional  
standard setting organization, related to individual audit engagements.  
Page 1  
Courtesy of Michigan Administrative Rules  
(j) “Individual with practice privileges” means an individual who practices in this state  
under section 727a of the code, MCL 339.727a.  
(k) “Nano-learning program” means a tutorial program designed to allow a participant  
to learn a given subject in a 10-minute period with electronic media and without  
interaction with a real-time instructor.  
(l) “Out-of-state firm” means a firm that may provide certain services and use the title  
“CPA firm” without obtaining a Michigan firm license under the conditions in section  
728(4) and (5) of the code, MCL 339.728.  
(m) "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.  
(n) "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 code, MCL 339.720.  
(o) "Qualifying hours" means continuing education hours that satisfy part 3 of these  
rules.  
(2) A term defined in the code 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 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
R 338.5102 Standards of professional practice adopted by reference.  
Rule 102. (1) The following standards are approved and 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, 2021, and any statements issued as of the effective date of  
this rule, which are available at a cost of $255.00 from the institute’s website at  
https://future.aicpa.org/cpe-learning/publication or at no cost from the institute’s website  
at https://us.aicpa.org/research/standards.html.  
(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” 2021 edition, and any  
updates issued as of the effective date of this rule, which are available at a cost of  
$205.00 from the AICPA’s website at https://future.aicpa.org/cpe-learning/publication or  
at no cost from the AICPA’s website at https://pcaobus.org/oversight/standards.  
(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" updated on April 14, 2021, which are available at no  
cost on the Office’s website at https://www.gao.gov/yellowbook.  
(d) The standards issued by the International Auditing and Assurance Standards Board  
(IAASB), 529 5th Avenue, New York, New York, 10017, in the publication entitled  
“2020 Handbook of International Quality Control, Auditing, Review, Other Assurance,  
and Related Services and Pronouncements” issued on September 14, 2021, and any  
related pronouncements issued as of the effective date of this rule, which are available at  
no cost from the IAASB's website at https://www.iaasb.org/standards-pronouncements.  
Page 2  
Courtesy of Michigan Administrative Rules  
(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 June 24, 2021, and any updates  
published as of the effective date of this rule, which are available at no cost from the  
board’s website at https://asc.fasb.org.  
(f) The accounting standards issued by the Governmental Accounting Standards Board  
(GASB), 401 Merritt 7, P.O. Box 5116, Norwalk, Connecticut, 06856, in the publication  
entitled “GASB Codification” as of December 31, 2020, and any pronouncements  
published as of the effective date of this rule, which are available at no cost from the  
board’s website at https://www.gasb.org/home.  
(g) The accounting standards issued by the International Accounting Standards Board,  
30 Cannon Street, London EC4M 6XH, United Kingdom, in the publication entitled  
“2021 International Financial Reporting Standards IFRS® ” and any pronouncements  
issued as of the effective date of this rule, which are available at a cost of £79.00 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 AACS; 2022 MR 22, Eff. Nov. 21,  
2022.  
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  
keep sufficient documentation, in any form, about 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.  
(2) Documents related to a peer review must be kept in accordance with and satisfy the  
AICPA's professional standards and retention policies under R 338.5102(1)(a) or until  
final adjudication of a complaint related to a peer review, whichever is later.  
(3) Documentation must be consistent with that required by professional standards or  
issued by the applicable nationally or internationally recognized professional standards  
setting organizations.  
Page 3  
Courtesy of Michigan Administrative Rules  
History: 2007 AACS; 2013 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
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 AACS.  
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 the section 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 verifying 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 allow a candidate to sit for the exam in another state if the candidate satisfies 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  
the board decides 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 earlier  
attempt of the same exam section has been released.  
History: 2003 AACS; 2013 AACS; 2021 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
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 the applicant’s grades within a  
reasonable time, but not later than 120 days after completion of the exam.  
Page 4  
Courtesy of Michigan Administrative Rules  
(3) A candidate may 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; 2022 MR 22, Eff. Nov. 21, 2022.  
R 338.5112 Rescinded.  
History: 1986 AACS; 1998-2000 AACS; 2013 AACS; 2021 AACS.  
R 338.5114 Rescinded.  
History: 1998-2000 AACS; 2007 AACS; 2013 AACS.  
R 338.5115 Educational requirements for the 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 code, MCL 339.725, an  
individual shall provide proof verifying both the following requirements:  
(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)  
or (4) of this rule or considered substantially equivalent under subrule (5) of this rule.  
(b) Completion of a concentration in accounting at a higher education institution  
approved under subrule (3) or (4) of this rule or considered substantially equivalent under  
subrule (5) of this rule, which 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) Three semester hours in auditing.  
(b) Twenty-four semester hours of general business subjects, other than accounting,  
which 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.  
(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.  
Page 5  
Courtesy of Michigan Administrative Rules  
(iii) Accounting systems and controls.  
(iv) Taxation.  
(v) Governmental/fund accounting.  
(3) The standards for recognition of accrediting organizations developed and adopted by  
the Council for Higher Education Accreditation (CHEA), One Dupont Circle NW, Suite  
510, Washington, D.C. 20036, in the publication entitled “CHEA Standards and  
Procedures for Recognition,” effective October 4, 2021, which are available at no cost on  
the council’s website at https://www.chea.org, are approved and adopted by reference. If  
a higher education institution is accredited by the accrediting body of the region in which  
the institution is located and the accrediting body satisfies the recognition standards of  
CHEA, then the institution is approved.  
(4) The criteria for recognition and the recognition process for the secretary’s  
recognition of accrediting agencies of the United States Department of Education, Office  
of Postsecondary Education, 400 Maryland Avenue SW, Washington, D.C. 20202, in 34  
CFR 602.10 to 602.39, effective July 1, 2020, which are available at no cost on the  
department’s website at https://www2.ed.gov/about/offices/list/ope/index.html, are  
approved and adopted by reference. If a higher education institution is accredited by the  
accrediting body of the region in which the institution is located and the accrediting body  
satisfies the recognition criteria and process of the United States Department of  
Education, then the institution is approved.  
(5) An individual who attended an unaccredited higher education institution shall  
establish that the applicant has completed educational requirements at a higher education  
institution that satisfies accreditation requirements substantially equivalent to those  
recognized in subrule (3) or (4) 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 of the National  
Association of Credential Evaluation Services (NACES).  
(6) Copies of the standards and criteria approved and adopted by reference in this rule  
are available for inspection and distribution at a cost of 10 cents per page from the Board  
of Accountancy, 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 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
R 338.5116 Educational requirements for certificate of CPA.  
Rule 116. (1) To satisfy section 725(1)(e) of the code, MCL 339.725, an individual  
shall provide proof verifying all the following requirements:  
(a) Completion of not less than 150 semester hours at a higher education institution  
approved under R 338.5115(3) or (4) or considered substantially equivalent under R  
338.5115(5).  
(b) Completion of a baccalaureate degree or higher degree from a higher education  
institution approved under R 338.5115(3) or (4) or considered substantially equivalent  
under R 338.5115(5).  
Page 6  
Courtesy of Michigan Administrative Rules  
(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 (4) or  
considered substantially equivalent under R 338.5115(5).  
(2) A person may earn credit only once for an accounting or general business topic. If  
the department decides 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 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
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  
Courtesy of Michigan Administrative Rules  
Rule 139. An individual shall not, as a condition of qualification for the practice  
privilege granted under section 727a of the code, MCL 339.727a, be required to satisfy  
the continuing professional education requirements of this state provided that the  
individual satisfies the continuing professional education requirements of the state of the  
individual’s principal place of business.  
History: 2013 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
R 338.5140 Permit for temporary practice.  
Rule 140. (1) An accountant who does not qualify for practice privileges under section  
727a of the code, MCL 339.727a or who does not hold a license to practice public  
accounting in this state, shall obtain a permit and pay the fee for each engagement in this  
state by the accountant, or on behalf of the accountant’s firm, who does not hold a license  
to practice public accountancy in this state. The applicant shall hold a license as a CPA of  
another state, or hold a title from a foreign country, recognized by the board as  
comparable to the Michigan certificate of CPA 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 begins on the date approved  
unless otherwise specified and must be for a specified period but must not be for more  
than 1 year.  
(3) The temporary practice shall be performed by, or under the direct supervision of, a  
licensed CPA, an individual with practice privileges under section 727a of the code,  
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 CPA, 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 a license to practice public accountancy in this  
state.  
(6) A temporary permit issued to an accountant also constitutes a temporary permit for  
the accountant’s firm, if the accountant’s 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 deciding whether the applicant is qualified to practice public  
accountancy temporarily in this state, the applicant shall pay the fee.  
History: 1979 AC; 1998-2000 AACS; 2007 AACS; 2013 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
R 338.5145 Rescinded.  
History: 1979 AC; 1982 AACS; 1986 AACS; 1996 AACS; 1998-2000 AACS;2007 AACS; 2013 AACS.  
Page 8  
Courtesy of Michigan Administrative Rules  
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 code, MCL 339.411 and 339.729. An applicant for  
Page 9  
Courtesy of Michigan Administrative Rules  
renewal shall provide the required fee and a completed application on a form provided by  
the department. Both of the following standards apply:  
(a) Under section 729(1) of the code, MCL 339.729, an applicant for renewal who is a  
nonresident licensee as that term is defined in section 720(1)(g) of the code, MCL  
339.720, is considered to have met the requirements under this part if the applicant  
satisfies all the following requirements:  
(i) Provides the required fee and a completed application on a form provided by the  
department.  
(ii) The state in which the applicant’s principal place of business is located requires  
continuing education for renewal of that state’s accountancy license.  
(iii) Meets the continuing education requirements of the state in which the applicant’s  
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 the applicant’s 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 standards apply:  
(a) An applicant shall keep documentation required by R 338.5215 as proof verifying  
satisfaction of the requirements under this rule for 4 years after the date of applying for  
license renewal.  
(b) A licensee is subject to audit under this part and may have to provide 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 code, 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 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
R 338.5211 Renewal of license with insufficient qualifying hours allowed 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; 2022 MR 22, Eff. Nov. 21, 2022.  
R 338.5215 Acceptable continuing education; requirements; limitations.  
Rule 215. (1) The continuing education hours required for renewal must satisfy the  
following requirements:  
Activity and Proof of Completion  
Number of Continuing  
Page 10  
Courtesy of Michigan Administrative Rules  
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 satisfies 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 the minutes for continuous  
instructor or discussion leader to lead a discussion on instruction  
in  
the  
the subject matter.  
following amounts:  
- The sponsor of the program takes individual  
attendance.  
- The sponsor of the program issues to each attendee credit)  
One-half  
credit  
for  
(0.5  
every  
a program outline and a written certification of the additional 25 minutes.  
attendee’s hours of attendance. One-fifth credit  
- The sponsor of the program keeps written records credit) for  
(0.2  
every  
of individual attendance and the program outline for additional 10 minutes.  
4 years.  
If audited, a licensee shall provide 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 satisfies 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 another nano-learning  
a minimum of 1 learning objective.  
course.  
- The program guides the participant through a  
program of learning and provides proof verifying 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  
- The sponsor of the program keeps written records  
Page 11  
Courtesy of Michigan Administrative Rules  
of the participant’s completion of the program and  
the program outline for 4 years.  
If audited, the licensee shall provide 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 satisfies R education hour.  
338.5255.  
- The course is offered by an educational institution  
that satisfies R 338.5115.  
If audited, the licensee shall provide 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 satisfies R credit hour.  
338.5255.  
- The course is offered by an educational institution  
that satisfies R 338.5115.  
If audited, the licensee shall provide 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 satisfies R 338.5255 and is offered granted for every 50  
at an educational institution that satisfies R 338.5115 minutes of continuous  
or conducting a group program that satisfies the instruction.  
requirements under activity (a) as a teacher,  
instructor, lecturer, speaker, or seminar discussion A maximum of 20  
leader.  
continuing  
education  
hours may be earned  
If audited, the licensee shall provide a copy of the during each continuing  
Page 12  
Courtesy of Michigan Administrative Rules  
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  
instruction  
credit (0.5  
½
- The subject matter of the program satisfies R credit) of 1 continuing  
338.5255.  
education hour.  
- The program is an educational course designed for  
self-study.  
One-fifth  
credit  
(0.2  
- The sponsor of the program issues the participants a credit) of 1 continuing  
written certification of the participant’s completion education hour is granted  
of the program and a program outline.  
for every additional 10  
- The sponsor of the program keeps written records minutes of continuous  
of the participant’s completion of the program and instruction after the first  
the program outline for 4 years.  
25 minutes of continuous  
instruction.  
If audited, the licensee shall provide a copy of a letter  
or certificate of completion provided by the program A combined maximum of  
sponsor verifying the licensee’s name, number of 20 continuing education  
continuing education hours earned, sponsor name hours may be earned  
and contact information, course title, course field of under this activity and  
study, date completed, and type of instruction or activity (b) during each  
delivery method used.  
continuing  
period.  
education  
(g) A course in professional ethics that satisfies the Continuing  
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 satisfies amount allowed under the  
R 338.5255(2).  
type of activity for which  
the course qualifies.  
If audited, the licensee shall provide 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  
rules applicable to public accountancy that satisfies continuous  
instruction  
continuing  
all the following requirements:  
equals  
1
education hour.  
- The content of the course is created by the  
Michigan Association  
of Certified Public  
Page 13  
Courtesy of Michigan Administrative Rules  
Accountants.  
- 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 keeps written records  
of the participant’s completion of the course and the  
course outline for 4 years.  
If audited, the licensee shall provide 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 equivalent 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  
AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
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.  
Page 14  
Courtesy of Michigan Administrative Rules  
R 338.5225 Rescinded.  
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  
code, MCL 339.411, if the applicant satisfies both of the following requirements:  
(a) Provides the required fee and a completed application on a form provided by the  
department.  
(b) Provides proof verifying 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 provided with the application are deficient,  
the application will be held by the department and the applicant shall provide proof  
verifying the completion of the deficient hours within 1 year after 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 code, MCL 339.411,  
if the applicant satisfies all the following requirements:  
(a) Provides the required fee and a completed application on a form provided by the  
department.  
(b) Establishes that the applicant holds a valid and unrevoked certificate as a CPA that  
was issued under section 725 or 726 of the code, MCL 339.725 or 339.726.  
(c) Provides proof verifying 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 provided with the application are deficient,  
the applicant has 1 year after the date of filing the application to provide proof verifying  
the completion of 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  
Courtesy of Michigan Administrative Rules  
History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2003 AACS; 2013 AACS; 2019  
AACS; 2021 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
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  
Courtesy of Michigan Administrative Rules  
(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  
Courtesy of Michigan Administrative Rules  
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  
Courtesy of Michigan Administrative Rules  
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  
Courtesy of Michigan Administrative Rules  
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 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, the department shall hold the firm, including an out-of-state firm,  
Page 20  
Courtesy of Michigan Administrative Rules  
responsible for compliance with the rules of professional conduct by all the firm’s  
officers, employees, partners, and principals.  
(2) An individual licensee, a firm licensee, and individual with practice privileges, or an  
out-of-state firm, shall not allow others to conduct on its behalf acts which, if conducted  
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; 2022 MR 22, Eff. Nov. 21, 2022.  
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 perform attest services as that term is defined in  
section 720 of the code, MCL 339.720, 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 decide 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; 2022 MR 22, Eff. Nov. 21, 2022.  
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  
Courtesy of Michigan Administrative Rules  
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) A contingent fee, as that term is defined in section 703(4) of the code,  
MCL 339.730, 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 code, MCL 339.730, 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 code, MCL 339.730, 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 show 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 not  
considered reasonable for preparation of original tax returns.  
Page 22  
Courtesy of Michigan Administrative Rules  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
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 services are of a particular standard when they are not.  
(c) Failing to perform, on a prompt basis, services in accordance with the conditions,  
terms, or prerequisites of a public communication or any quotation.  
(d) Misrepresenting facts or not disclosing 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 the board’s  
authorized representatives relative to the administration of the code.  
(m) Providing false or misleading information on the qualifying experience of an  
applicant for CPA.  
(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; 2022 MR 22, Eff. Nov.  
21, 2022.  
R 338.5470 Rescinded.  
History: 1979 AC; 1986 AACS.  
R 338.5475 Payment or acceptance of commissions; "commission" defined.  
Page 23  
Courtesy of Michigan Administrative Rules  
Rule 475. (1) As used in section 731 of the code, MCL 339.731, "commission" means  
any consideration paid to an individual licensee, a firm licensee, an individual with  
practice privileges, or 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 code, MCL 339.731, 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; 2022 MR 22, Eff. Nov. 21, 2022.  
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 take part in a peer review  
program under section 729(2) of the code, MCL 339.729, shall enroll in the program of a  
qualified sponsoring organization within 1 year of the earlier of the following:  
(a) The firm or solo practitioner’s initial licensing date.  
(b) The performance of services that require a peer review.  
(2) Proof verifying a peer review shall not have to be provided 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 verifying compliance with section 729(2) of  
the code, MCL 339.729, the electronic submission of information from the facilitated  
state board access (FSBA) website.  
(4) Qualified sponsoring organizations include the AICPA peer review program, and  
other entities that adhere to the peer review standards defined in R 338.5102(1)(a) as  
decided by the board. With respect to an out-of-state firm required to obtain a license  
under section 728 of the code, MCL 339.728, 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 section 728(5) of the code,  
MCL 339.728, may, instead of enrolling in a program sponsored by an organization  
described in subrule (3) of this rule, satisfy the peer review requirement applicable in the  
state where that firm is licensed, verified proof of which shall be given to the department  
upon the department’s request.  
Page 24  
Courtesy of Michigan Administrative Rules  
History: 2007 AACS; 2013 AACS; 2022 MR 22, Eff. Nov. 21, 2022.  
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 decide which firm is considered the succeeding firm. The  
succeeding firm shall keep 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 failed 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 satisfy the applicable review standards in place  
at the time of the review. The following standards apply:  
(a) Documents related to a peer review must be kept and satisfy the AICPA's retention  
policies under 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; 2022 MR 22, Eff. Nov. 21, 2022.  
Page 25  
Courtesy of Michigan Administrative Rules  
;