Rules & Regulations of the State of Tennessee Title 0020 - Accountancy
Rules & Regulations of the State of Tennessee, Title 0020 – Accountancy
Overview:
Title 0020 governs the practice of accountancy in Tennessee. It is enforced by the Tennessee State Board of Accountancy and covers licensure, professional conduct, disciplinary procedures, continuing education, and peer review requirements. Its goal is to ensure that accountants in Tennessee are competent, ethical, and accountable to the public.
The rules are generally divided into six chapters:
Licensing & Registration
Education & Experience Requirements
Rules of Professional Conduct
Disciplinary Action & Civil Penalties
Continuing Education
Peer Review Program
Chapter 1: Licensing & Registration
Purpose
This chapter outlines the requirements to become a CPA (Certified Public Accountant) or PA (Public Accountant) in Tennessee. It also covers registration of accounting firms.
Key Requirements
Must pass the Uniform CPA Exam.
Must submit proof of education and work experience.
Must apply for a license and pay the required fees.
Reciprocal licensing is available for CPAs licensed in other states, if they meet Tennessee’s requirements.
Licenses must be renewed periodically; expired licenses may need re-qualification or reinstatement.
Definitions
Practice of public accountancy: Offering services such as audits, reviews, compilations, tax, and consulting to the public using the CPA or PA title.
Financial statements: Reports prepared according to Generally Accepted Accounting Principles (GAAP).
Expired license: A license more than six months past its renewal date.
Chapter 2: Education & Experience Requirements
Education
Bachelor’s degree or higher from an accredited university.
Minimum semester hours in accounting subjects (e.g., auditing, tax, financial reporting).
Total of at least 150 semester hours of education (common standard for CPAs).
Experience
Practical work experience under the supervision of a licensed CPA.
Experience may include audits, tax preparation, financial analysis, or other attest services, as approved by the Board.
Chapter 3: Rules of Professional Conduct
Purpose
This chapter sets ethical and professional standards for all licensed accountants.
Core Obligations
Integrity & Objectivity: Licensees must avoid conflicts of interest and act honestly.
Competence: Only perform services for which the accountant is qualified.
Confidentiality: Client information must not be disclosed without permission.
Independence: Required for audits and other attest services.
Due Professional Care: Services must meet professional standards and comply with GAAP.
Examples
A CPA cannot certify a financial statement as GAAP-compliant if it materially deviates from GAAP.
A CPA cannot represent themselves as licensed if their license is expired or revoked.
Chapter 4: Disciplinary Action & Civil Penalties
Grounds for Discipline
The Board can discipline licensees for:
Fraud, deceit, misrepresentation, or gross negligence.
Violating professional conduct rules.
Practicing without a valid license.
Failing to comply with continuing education or peer review requirements.
Civil Penalties
Penalties include fines, suspension, revocation, probation, or formal reprimand.
Licensees have a right to a hearing before discipline is imposed.
Due Process
The Board must provide written notice of any proposed disciplinary action.
The licensee has the right to a hearing under the Uniform Administrative Procedures Act.
Judicial review of Board decisions is available in Tennessee courts.
Relevant Case Law
Osborne v. Tennessee State Board of Accountancy (Tenn. Ct. App., 2015): Court held that licensees must follow the Board’s procedural rules for challenging disciplinary actions. Failure to file timely challenges can result in dismissal.
Tennessee Code §62‑1‑111: Establishes that no disciplinary action (e.g., suspension, revocation, or civil penalty) can occur without written notice and opportunity for a hearing.
Chapter 5: Continuing Education (CPE)
Licensees must complete a minimum number of CPE hours for each renewal period (usually annually).
Acceptable programs include live courses, self-study, webinars, or other Board-approved programs.
Records of CPE must be maintained and available for audit by the Board.
Chapter 6: Peer Review Program
Peer review ensures quality of accounting services and compliance with professional standards.
Accounting firms must participate in a Board-approved peer review program.
Reports are submitted to the Board, and failure to comply may result in disciplinary action.
Practical Implications for Accountants
Licensure Compliance: Keep your CPA or PA license current and maintain proper documentation.
Ethical Practice: Follow all rules of professional conduct to avoid disciplinary action.
Continuing Education: Track and report CPE credits to maintain licensure.
Peer Review: Cooperate fully with peer review requirements to ensure compliance.
Discipline & Appeals: Always respond promptly to notices and understand your right to a hearing.
Summary
Tennessee’s Title 0020 – Accountancy is designed to:
Protect the public by ensuring competent and ethical accountants.
Provide clear rules for licensure, conduct, and ongoing professional development.
Allow disciplinary action and penalties for violations, while guaranteeing due process.
Case law such as Osborne v. Tennessee State Board of Accountancy reinforces the need for compliance with procedural rules in disciplinary matters.
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