California Board of Accountancy

Practice Privilege

Where can I find the statutes and regulations regarding California practice privilege?

The practice privilege program is governed by sections 5096 through 5096.21 of the California Business and Professions Code (Accountancy Act) and sections 5.5 and 18 through 36.1 of the California Code of Regulations, Title 16, Division 1, Article 4 (CBA Regulations) available on the laws and rules page of the CBA website at www.dca.ca.gov/cba/laws_and_rules/ or by contacting the CBA Practice Privilege Unit by email at pracprivinfo@cba.ca.gov or by telephone at (916) 561-1704.


What qualifications must I meet to obtain a practice privilege in California?

To be eligible for a California practice privilege:


  • You cannot maintain an office location (except as an employee of a firm registered in this state) or principal place of business in California.
  • You must hold a valid and current license, certificate, or permit to practice public accountancy from another state and meet one of the following requirements:
  • Have continually practiced public accountancy as a CPA under a valid license issued by any state for four of the last 10 years;
  • Possess a license, certificate, or permit from a state deemed by the CBA to have education, examination and experience requirements substantially equivalent to the requirements under Section 5093 of the Accountancy Act; or
  • Possess individual education, examination, and experience qualifications that have been determined by the CBA to be substantially equivalent to the qualifications under Section 5093 of the Accountancy Act. Per Section 27(b) of the CBA Regulations, the CBA will accept individual qualification evaluations of substantial equivalency completed by the National Association of State Boards of Accountancy's (NASBA) CredentialNet. Information regarding CredentialNet can be found on the NASBA's website at www.nasba.org.

What are the fee and notification requirements?

As of July 1, 2013, the notification fee was eliminated. Additionally, an individual who qualifies for the practice privilege may engage in the practice of public accountancy in this state without first submitting notification to the CBA unless certain disqualifying conditions exist.


What is the definition of principal place of business?

Principal place of business is defined by section 18 of the CBA Regulations to mean the office location designated by the licensee for purposes of practice privilege.


Can I open a California office and practice full or part-time there under a California practice privilege?

Pursuant to Section 5096(e)(3) of the Accountancy Act, an individual who holds a California practice privilege shall not provide public accountancy services in this state from any office located in this state, except as an employee of a firm registered in this state. This does not apply to public accountancy services provided to a client at the client's place of business or residence. In addition, an individual who has his or her place of business in California is not qualified to practice in California under a practice privilege.


Can I practice public accountancy in California under a practice privilege if my California license is inactive, delinquent, or cancelled and I hold a current license in another state?

Yes, you may allow your California CPA license to lapse and practice under a California practice privilege as long as you have a valid, current CPA license in another state and meet all requirements to exercise a California practice privilege. Please note, you cannot maintain an office location or a principal place of business in California under practice privilege.

You should carefully consider the consequences of allowing your California CPA license to be cancelled. For additional information, please review the CPA Licensee Handbook or contact the Renewal Unit by email at renewalinfo@cba.ca.gov or by telephone at (916) 561-1702.


How do I know if I am required to notify the CBA prior to exercising a California practice privilege?

You are required to notify the CBA of your intent to practice public accountancy in California and receive written permission from the CBA prior to exercising the practice privilege if, within the last seven years immediately preceding the date on which you wish to practice in this state, any of the following criteria apply:


  • You have been the subject of any final disciplinary action by the licensing or disciplinary authority of any other jurisdiction with respect to any professional license or have any charges of professional misconduct pending against you in any other jurisdiction.
  • You have had your license in another jurisdiction reinstated after a suspension or revocation of the license.
  • You have been denied issuance or renewal of a professional license or certificate in any other jurisdiction for any reason other than an inadvertent administrative error.
  • You have been convicted of a crime or are subject to pending criminal charges in any jurisdiction other than minor traffic infractions under $1000 not involving alcohol, dangerous drugs, or controlled substances or convictions adjudicated in the juvenile court.
  • You have otherwise acquired a disqualifying condition as described in subdivision (a) of Section 5096.2 and the CBA's "Pre-Notification of Listed Event's Form" (PP-10 (1/13)).

If any of the above-listed conditions apply you must submit a completed "Pre-Notification of Listed Events Form" (PP-10 (1/13)), available on the forms page of the CBA website, to the CBA and you may not practice public accountancy in this state until the CBA provides you with written permission to do so.


Under what circumstances must I cease practice in California?

You must cease exercising the practice privilege if any of the following apply:


  • The regulatory agency in the state in which your certificate, license, or permit was issued has taken disciplinary action resulting in the suspension or revocation, including stayed suspension, stayed revocation, or probation of your certificate, license, or permit, or takes other disciplinary action against your certificate, license, or permit that arises from any of the following:
  • Gross negligence, recklessness, or intentional wrongdoing relating to the practice of public accountancy.
  • Fraud or misappropriation of funds.
  • Preparation, publication, or dissemination of false, fraudulent, or materially incomplete or misleading financial statements, reports, or information.
  • If you are convicted in any jurisdiction of any crime (misdemeanor, felony, infraction or citation) involving dishonesty, including, but not limited to, embezzlement, theft, misappropriation of funds or property, or obtaining money, property, or other valuable consideration by fraudulent means or false pretenses.
  • The United States Securities and Exchange Commission or the Public Company Accounting Oversight Board bars you from practicing before them.
  • Any governmental body or agency suspends your right to practice before the body or agency.

If any of the above-listed criteria apply, you are required to immediately cease practice and you must notify the board within 15 calendar days, on the "Notification of Cessation of Practice Privilege Form" (PP-11 (1/13)), available on the forms page of the CBA website. You may not practice public accountancy in this state until you have received written permission from the CBA to do so.


What experience must I fulfill before I sign an attest report under California practice privilege?

No. Pursuant to Section 5096(d)(3) of the Accountancy Act, a California Practice Privilege holder cannot open a California office and provide public accountancy services from that office.


What documentation must I provide with the California Practice Privilege Notification Form?

You may not sign an attest report unless you have completed at least 500 hours of experience in attest services as described in section 5095 of the Accountancy Act and section 12.5 of the CBA Regulations. Qualifying experience may be gained through employment in public accounting, private industry, or government. Experience acquired in academia does not qualify. In order to be qualifying, experience must meet the following requirements:


  • Experience must be completed under the supervision or in the employ of a person holding a valid license or comparable authority under the laws of any state or country to engage in the practice of public accountancy and to provide attest services as specified in section 5095(b) of the Accountancy Act. Supervised experience means that the applicant's supervisor shall have reviewed and evaluated the applicant's qualifying work, on a routine and recurring basis and shall have authority and oversight over the applicant.
  • Experience may not be supervised by a licensee who provides public accounting services to the applicant's employer.
  • Experience must include all of the following:
  • (1) Experience in the planning of the audit including the selection of the procedures to be performed.
  • (2) Experience in applying a variety of auditing procedures and techniques to the usual and customary financial transactions included in financial statements.
  • (3) Experience in the preparation of working papers in connection with the various elements of (1) and (2) above.
  • (4) Experience in the preparation of written explanations and comments on the work performed and its findings.
  • (5) Experience in the preparation of and reporting on full disclosure financial statements.

Please note, you may only perform attest and certain other services for an entity headquartered in California through a firm of certified public accountants that has obtained a registration from the CBA pursuant to sections 5096 (d) and 5096.12 of the Accountancy Act.


Are there any limitations on the services that I can provide under a California practice privilege?

An individual who qualifies for a practice privilege may perform the following services only through a firm of certified public accountants that has obtained a registration from the CBA pursuant to section 5096.12 of the Accountancy Act:


  • An audit or review of a financial statement for an entity headquartered in California.
  • A compilation of a financial statement when that person expects, or reasonably might expect, that a third party will use the financial statement and the compilation report does not disclose a lack of independence for an entity headquartered in California.
  • An examination of prospective financial information for an entity headquartered in California.

Please note, in order to provide attest services, you must also meet the attest experience requirement outlined in section 5095 of the Accountancy Act and section 12.5 of the CBA Regulations.


Are there any registration requirements in order for my out-of-state licensed firm to practice under a California practice privilege?

A certified public accounting firm that is authorized to practice in another state and that does not have an office in this state may engage in the practice of public accountancy in this state through the holder of a practice privilege provided that:

  • The practice of public accountancy by the firm is limited to authorized practice by the holder of the practice privilege.
  • A firm that engages in practice is deemed to consent to the personal, subject matter, and disciplinary jurisdiction of the CBA with respect to any practice under practice privilege.
  • A firm that intends to provide the following services must first obtain a registration from the CBA:
  • An audit or review of a financial statement for an entity headquartered in California.
  • A compilation of a financial statement when that person expects, or reasonably might expect, that a third party will use the financial statement and the compilation report does not disclose a lack of independence for an entity headquartered in California.
  • An examination of prospective financial information for an entity headquartered in California.

The "Out-of-State Accounting Firm Registration Form" (PP-13 (1/13)) is available on the forms page of the CBA website or by contacting the CBA Initial Licensing Unit by email at licensinginfo@cba.ca.gov or by telephone at (916) 561-1701.