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 state 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) “CPA” means certified public accountant.

(f) “Disclose” means to provide a written communication from a CPA or 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.

(g) “Enterprise” means a person for which an individual licensee, firm licensee,

individual with practice privileges, or 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 based on generally accepted accounting

principles or another comprehensive basis of accounting. Financial statements 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 issued by

the applicable nationally or internationally recognized professional standard setting

organization related to individual accounting engagements.

(j) “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.

(k) “Individual with practice privileges” means an individual who practices in this state

under section 727a of the code, MCL 339.727a.

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(l) “Nano-learning program” means a tutorial program designed to allow a participant

to learn a given content area in a 10-minute period with electronic media and without

interaction with a real-time instructor.

(m) “Out-of-state firm” means a firm that may provide certain services and use the title

“CPA firm” without obtaining a firm license under the conditions in section 728(4) and

(5) of the code, MCL 339.728.

(n) “Professional engagement” means an agreement between a client and an individual

licensee, firm licensee, individual with practice privileges, or 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, firm licensee, individual with practice privileges, or 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.

(p) “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 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

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, in the publication titled “AICPA Professional

Standards” updated June 15, 2022, and any statements issued as of the effective date of

this rule, which are available at a cost of $289.00 from the institute’s website at

https://www.aicpa.org/cpe-learning/publication or at no cost from the institute’s website

at https://us.aicpa.org/research/standards.

(b) The standards issued by the Public Company Accounting Oversight Board

(PCAOB), 1666 K Street NW, Suite 300, Washington, District of Columbia, 20006, in

the publication titled “PCAOB Standards and Related Rules” 2022 edition, and any

updates issued as of the effective date of this rule, which are available at a cost of

$255.00 from the AICPA’s website at https://www.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

Street, NW, Washington, District of Columbia, 20548, in the publication titled

“Government Auditing Standards” 2018 Revision Technical Update April 2021, which

are

available

at

no

cost

on

the

Office’s

website

at

https://gaoinnovations.gov/yellowbook/.

(d) The standards issued by the International Auditing and Assurance Standards Board

(IAASB), 529 5^thAvenue, New York, New York, 10017, in the publication titled “2021

Handbook of International Quality Control, Auditing, Review, Other Assurance, and

Related Services Pronouncements” issued on December 2, 2022, 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.

(e) The accounting standards issued by the Financial Accounting Standards Board

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(FASB), 801 Main Avenue, P.O. Box 5116, Norwalk, Connecticut, 06856, in the

publication titled “FASB Accounting Standards Codification” as of December 2022, 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), 801 Main Avenue, P.O. Box 5116, Norwalk, Connecticut, 06856, in the

publication titled “GASB Codification” as of December 31, 2021, 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://gars.gasb.org/.

(g) The accounting standards issued by the International Accounting Standards Board,

30 Cannon Street, London EC4M 6XH, United Kingdom, in the publication titled “2022

International Financial Reporting Standards IFRS®” issued on January 1, 2022, and any

pronouncements issued as of the effective date of this rule, which are available at a cost

of £81.00 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 AACS; 2023 MR 20,

Eff. Oct. 24, 2023.

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.

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History: 2007 AACS; 2013 AACS; 2022 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 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 30-month period

beginning on the date that the score is released for the first section passed. If all sections

are not passed within the rolling 30-month period, then credit for any section passed

outside the 30-month period expires and the section must be retaken.

(c) The department may extend the rolling 30-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 proof, as directed by

the department, 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 is equivalent to the exam provided by the department.

(f) An applicant may retake an exam section after the applicant’s grade for any earlier

attempt of the same exam section has been released.

History: 2003 AACS; 2013 AACS; 2021 AACS; 2022 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

R 338.5111 Exam scores.

Rule 111. (1) The minimum passing grade for each section 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.

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(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 AACS; 2023 MR 20, Eff. Oct.

24, 2023.

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, as directed by the department, 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 both the accounting and general business

requirements under subrule (2) of this rule.

(2) A concentration in accounting must include both the following accounting and

general business requirements:

(a) Not less than 24 semester hours of accounting courses in all the following

accounting content areas:

(i) Accounting information systems.

(ii) Auditing and attestation services.

(iii) Cost or managerial accounting.

(iv) Financial accounting and reporting.

(v) Governmental or fund accounting.

(vi) Taxation.

(b) Not less than 24 semester hours of general business courses, other than accounting,

which may include any of the following general business content areas:

(i) Business communications.

(ii) Business ethics.

(iii) Business law.

(iv) Economics.

(v) Finance.

(vi) Management.

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(vii) Marketing.

(viii) Information systems or technology.

(ix) Quantitative methods.

(x) Statistics.

(xi) Other general business content areas approved by the department.

(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 titled “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 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

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, as directed by the department, 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).

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(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).

(c) Completion of a concentration in accounting under R 338.5115(1)(b) and (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 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

R 338.5117

Certificate of certified public accountant; qualifying experience

requirement.

Rule 117. (1) An applicant 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 courses above the elementary level.

History: 2013 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

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.

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R 338.5139 Practice privilege.

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 AACS.

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 AACS.

R 338.5145 Rescinded.

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History: 1979 AC; 1982 AACS; 1986 AACS; 1996 AACS; 1998-2000 AACS;2007 AACS; 2013 AACS.

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.

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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

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 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, as directed

by the department, 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 on request of the department.

(3) An applicant must submit a request for a waiver of continuing education

requirements to the department for the board’s consideration not less than 30 days before

the last regularly scheduled board meeting 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 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

R 338.5211 Renewal of license with insufficient qualifying hours allowed under

certain circumstances.

Rule 211. A licensee who does not earn sufficient qualifying hours during the

continuing education period may be allowed to renew a license after 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 does not apply toward the

qualifying hours of continuing education credit required in a continuing education period

for the renewal of a license.

History: 1986 AACS; 1996 AACS; 1998-2000 AACS; 2022 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

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

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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 content area 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 content area.

following amounts:

- The sponsor of the program takes individual

attendance.

One-half credit, 0.5 credit,

- The sponsor of the program issues to each attendee for every additional 25

a program outline and a written certification of the minutes.

attendee’s hours of attendance.

- The sponsor of the program keeps written records credit,

One-fifth

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 content area 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

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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 content area of the course satisfies R 338.5255. education hour.

- 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 content area of the course satisfies R 338.5255. credit hour.

- 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 content area satisfies R 338.5255 and is offered at granted for every 50

an educational institution that satisfies R 338.5115 or minutes of continuous

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

confirmation letter provided by the program sponsor education period.

or the institution verifying the licensee’s name,

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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 credit, 0.5 credit,

- The content area of the program satisfies R of 1 continuing education

instruction

338.5255.

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 content area of the course satisfies R amount allowed under the

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

Accountants.

of Certified Public

- The course provider issues the participants a written

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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 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

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.

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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, as directed by the department, 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, as directed by the department, 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, as directed by the department, 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, as directed by the department, 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.

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History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2003 AACS; 2013 AACS; 2019

AACS; 2021 AACS; 2022 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

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 content areas.

Rule 255. (1) Content areas 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 content areas that contribute to the professional competency of a licensee

and for which the responsibility for compliance rests solely with the applicant or licensee.

(2) Content areas 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:

(i) Ethical reasoning.

(ii) Ethical philosophy.

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(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 content area 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 applicant or licensee.

History: 1979 AC; 1986 AACS; 1996 AACS; 1998-2000 AACS; 2013 AACS; 2019 AACS; 2023 MR

20, Eff. Oct. 24, 2023.

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.

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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.

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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.

R 338.5337 Rescinded.

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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,

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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 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 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 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.

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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.

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History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2013 AACS; 2022 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 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 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 code, MCL 339.731, "commission" means

any consideration paid to an individual licensee, a firm licensee, an individual with

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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 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 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 sole practitioner’s initial licensing date.

(b) The performance of services that require a peer review.

(2) The firm or sole practitioner shall not have to provide proof verifying a peer review

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.

(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 must be given to the department

on the department’s request.

History: 2007 AACS; 2013 AACS; 2022 AACS; 2023 MR 20, Eff. Oct. 24, 2023.

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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 AACS.

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