Michigan: CPE, firm permit and peer review rules for CPAs.

This page lists what the Michigan board of accountancy publishes for a CPA and a CPA firm: CPE hours and the reporting period, the ethics requirement, whether a firm permit or registration is required, whether peer review is required, the licence renewal cycle, and whether an out-of-state CPA may practise under a practice privilege.

It is built for owners of small accounting and bookkeeping firms, especially those licensed in one state and serving clients in another. Every entry is a snapshot of what the cited source published on the verification date; it is a research starting point, not licensing advice.

Michigan, field by field.

Board of accountancy

Michigan State Board of Accountancy (Department of Licensing and Regulatory Affairs, Bureau of Professional Licensing)

CPE hours & reporting period

40 hours for each year of the two-year licence cycle (80 hours per cycle); licences expire July 31. MCL 339.729(1): 'As a condition of license renewal, an individual licensee must successfully complete at least 40 hours of continuing education for each year of a license cycle.'; MCL 339.729(1)(b): 'At least 8 of the 40 hours of continuing education for each year of a license cycle must be in the areas of auditing and accounting.'; MCL 339.729(1)(a): 'A licensee is not required to meet the continuing education requirements for a period of 12 months, beginning on the date of his or her original license.'; MCL 339.729(1)(e): a licensee who earns more than 40 hours in a year 'may carry over those excess hours to the next year, but not to any subsequent year', subject to (1)(e)(i)–(iv): a cap of 40 carried-over hours, of which no more than 8 may meet the next year's accounting and auditing minimum, no more than 2 the next year's ethics minimum, and no more than 1 hour of Michigan public accountancy content the next cycle's ethics minimum; MCL 339.729(1)(g) and R 338.5210(1)(a): a nonresident licensee who meets the continuing education requirements of the state of the principal place of business 'is considered to have met the continuing education requirements under this subsection'; if that state has no requirement, Michigan's applies. Board (LARA) Licensed Accountant Licensing Guide: 'Renewal Cycle: 2 years'; 'The expiration date for all accountancy licenses is 07/31.'; 'Completion of at least 40 hours of continuing education for each year of the license cycle'. R 338.5215(1)(b) and (1)(f): 'A combined maximum of 20 continuing education hours may be earned' from nano-learning and self-study 'during each continuing education period'; R 338.5215(1)(e): 'A maximum of 20 continuing education hours may be earned during each continuing education period' as a teacher, instructor, speaker, lecturer or seminar discussion leader. R 338.5210(2)(a): documentation kept 'for 4 years after the date of applying for license renewal.' R 338.5211: a licensee short of hours may renew 'after reporting 80 qualifying hours and an additional 4 hours of continuing education credit for each month of time needed to remove the deficiency.'

Ethics CPE requirement

2 hours per year of the licence cycle; 1 of the 4 ethics hours in the two-year cycle must be a Michigan-specific course. MCL 339.729(1)(c): 'at least 2 of the 40 hours of continuing education for each year of a license cycle must be in the area of professional ethics.'; MCL 339.729(1)(d): 'The content of 1 hour of the 4 hours of continuing education in professional ethics required in a 2-year license cycle must be the statutes and administrative rules of this state applicable to public accountancy.', with the content created by a department-approved statewide CPA association; R 338.5215(1)(h): 'Completion of a course in Michigan statutes and rules applicable to public accountancy' whose content 'is created by the Michigan Association of Certified Public Accountants.' Board guide: 'Two of the 40 hours of continuing education for each year of the license cycle must be in professional ethics.' and 'One of the 4 hours in professional ethics required in the 2-year license cycle must satisfy the requirements under MCL 339.729(1)(d) and R338.5215(1)(h).'

CPA firm permit / registration

Firm licence required for a firm with an office in Michigan; two-year renewal cycle expiring July 31. MCL 339.728(1): 'A firm that establishes or maintains an office in this state must apply for and obtain a Michigan license' under this article to practise public accounting; MCL 339.728(2)(a): 'At least a simple majority of the equity and voting rights of the firm are held directly or beneficially' 'by individuals who are licensed in good standing as certified public accountants of this state or another state' (or hold practice privileges under section 727a); MCL 339.728(2)(b): 'All attest and compilation services provided by the firm in this state are performed under the supervision' 'of an individual who is licensed and in good standing as a certified public accountant in this state' or the acceptable equivalent; MCL 339.728(3): 'A firm shall notify the department of any change in address within 30 days of the change.'; MCL 339.728(4)–(5): a firm not required to be licensed may perform SSARS review engagements, SSAE examinations, reviews or agreed-upon procedures, or compilations for Michigan clients, or use the 'CPA' or 'CPA firm' title, only if it meets (2)(a)–(b) and section 729(2), works through an individual with section 727a practice privileges and the services are authorized where that individual's principal place of business is. Board (LARA) Accountancy Firm Licensing Guide: 'The accountancy (CPA) firm license allows a firm to engage in the unrestricted practice of public accounting.'; 'Accountancy (CPA) Firm license: $300.00'; renewal fee $200.00; 'Renewal Cycle: 2 years'; 'The expiration date for all accountancy licenses is 07/31.'

Peer review requirement

Licensed firms and sole practitioners performing audits, reviews, or compilations relied upon by third parties must participate in a peer review program; proof within the 3 years before renewal. MCL 339.729(2): 'Each licensed firm and sole practitioner that performs any of the following services shall participate in a peer review program established by rule of the department and approved by the board: (a) Audit. (b) Review. (c) Compilations that are relied upon by third parties.' MCL 339.729(3): a renewal applicant shall submit 'proof of peer review obtained within the 3 years immediately preceding the application.' MCL 339.729(4): the firm or sole practitioner 'shall notify the department within 30 days after receipt of a fail rating or second consecutive pass with deficiencies rating.' Mich Admin Code R 338.5501(1): a firm or sole practitioner subject to section 729(2) 'shall enroll in the program of a qualified sponsoring organization within 1 year of the earlier of' its initial licensing date or 'The performance of services that require a peer review.'; R 338.5501(2): proof is not required 'until the second renewal following initial licensure or the performance of services requiring a peer review.'; R 338.5501(3): electronic submission from the facilitated state board access (FSBA) website is accepted as proof; R 338.5501(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'; R 338.5501(6): an out-of-state firm required to obtain a peer review under section 728(5) may instead satisfy the peer review requirement of the state where it is licensed. R 338.5503(3): the department may rely on a failed report or a second consecutive pass-with-deficiencies report 'as prima facie evidence of a violation of professional standards.' Board (LARA) firm guide: 'A licensed firm that performs audits, reviews and/or compilations shall provide proof of peer review obtained within the 3 years immediately preceding the application. The firm will not need to provide proof until the second renewal following initial licensure or the performance of services requiring a peer review.'; 'Peer Review Fee (if applicable): $100.00'. Board CPA guide: the same 3-year proof applies to 'A sole practitioner that performs audits, reviews and/or compilations'. R 338.5301–R 338.5351 (Part 3, Continuing Education) are shown as 'Rescinded' (history '1979 AC; 1996 AACS') and are not identified as peer review rules.

Licence renewal cycle

Two-year cycle; all accountancy licences expire July 31. Board (LARA) Licensed Accountant Licensing Guide: 'Renewal Cycle: 2 years'; 'The expiration date for all accountancy licenses is 07/31.'; renewal is completed online at www.michigan.gov/miplus 'no sooner than 90 days prior to the expiration date of current license.'; 'CPA Renewal Application Fee: $200.00'. R 338.5210(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.' R 338.5210(2): 'Submission of an application for renewal constitutes the applicant's certification of compliance with the requirements of this rule.' R 338.5230(1)(b): relicensure after a lapse of less than 3 years requires proof 'verifying the completion of 40 hours of continuing education within the 12 months immediately preceding the date of filing the relicensure application.'

Mobility / practice privilege

Practice privilege without a Michigan certificate, licence or temporary permit; no notice, fee or submission. MCL 339.727a(1): 'An individual whose principal place of business is not in this state' who holds a valid CPA licence from a jurisdiction that requires 'at least 150 semester hours of college education', a passing grade on the Uniform CPA Examination and 'at least 1 year of experience' (or from a jurisdiction with substantially equivalent qualifications) 'is considered to have qualifications substantially equivalent to this state's requirements' and 'may practice public accountancy without the need to obtain a certificate, license, or temporary practice permit'; MCL 339.727a(2): such an individual 'shall be granted practice privileges in this state,' 'and no notice, fee, or other submission is required of that individual.' Board (LARA) Accountant Temporary Practice Permit Guide: a separate temporary practice permit ('Accountant Temporary Practice Permit: $100.00'; 'This permit cannot be held for more than one year.') is available to a licensed out-of-state accountant.