The concept of Substantial Equivalency was developed to allow licensed CPAs to practice across jurisdictions more readily. Under Section 23 of the Uniform Accountancy Act (UAA), a CPA with a CPA license in good standing from a jurisdiction with CPA licensing requirements that are essentially equivalent to those outlined in the UAA (degree with 150 hours, minimum one year experience and successful completion of the Uniform CPA Examination) may be granted a privilege to practice in another jurisdiction that is not the CPA’s principal place of business.
Most jurisdictions have adopted a Section 23 privilege to practice. It is the responsibility of the CPA to contact the Board of Accountancy in the state he/she intends to practice to determine if the state has adopted Section 23 and if it requires notification or payment of a fee. This information may also be found in NASBA’s Accountancy Licensing Library and on CPAMobility.org.
NASBA’s National Qualification Appraisal Service (NQAS) has reviewed the CPA licensure requirements of its member jurisdictions to determine which CPA licensure requirements are substantially equivalent to the licensure requirements of the UAA. Individuals who are licensed in jurisdictions that are not substantially equivalent may have their credentials evaluated by NASBA’s CredentialNet service to determine their individual substantial equivalency.
Substantially Equivalent States
The National Qualification Appraisal Service has found the following jurisdictions to have CPA licensure requirements that are substantially equivalent to those of the UAA:
* These states are two-tier. A certificate is initially obtained which does not allow the individual full privileges as a CPA. After additional requirements are met, the certificate holder may receive a license or permit. Only those CPAs holding an active license or permit are considered substantially equivalent.
** These states currently have more than one path to licensure, with at least one path meeting the 3E criteria of the UAA (baccalaureate degree or higher with 150 semester hours, minimum one year experience and Uniform CPA Examination). Based on their current laws/rules, these states have passed legislation terminating the alternative paths within the time limits set forth by the UAA and Substantial Equivalency Guidelines in Section A of Appendix C.
Applicant must have a baccalaureate degree from an acceptable college or university with a concentration in accounting or the equivalent that includes:
- 27 hours in accounting courses such as cost accounting, tax, intermediate accounting, accounting theory and advanced cost accounting; three of the 27 hours must be in auditing that covers Generally Accepted Auditing Standards (GAAS);
- A minimum of 21 semester hours in general business courses such as business law, management, marketing, statistics, business communication, economics and finance with no more than six semester hours in each subject.
Effective July 1, 2015, any applicant for CPA licensure will be required to obtain a baccalaureate degree and 150 semester hours of education and one year of acceptable experience.
- A diploma from a four year high school and six years of public accounting experience preceding the date of application;
- A degree from a recognized college or university and three years of experience immediately preceding application in public accounting or in governmental accounting as an auditor or internal revenue agent; OR
- A degree from a recognized college or university and completion of 30 or more semester hours of study in accounting, business law, economics, and finance (of which a minimum of 20 semester hours are in accounting) and two years of experience immediately preceding application in public accounting or in governmental accounting as an auditor or internal revenue agent.
As of May 16, 2015, Pathway 1 above with a high school diploma will terminate. Between May 16, 2015 and May 16, 2020, the applicable pathways will be:
- A baccalaureate degree or its equivalent, including at least 120 semester hours of education conferred by a college or university acceptable to the Board, with an accounting concentration or equivalent as determined by Board rule to be appropriate and one year of acceptable experience; or
- Graduation from a college or university recognized by the Board, but if the applicant has not completed the hours of study and subjects specified in Board’s regulation, the applicant must have been engaged in the practice of public accounting or in the employ of a public accountant or certified public accountant, for three years preceding the date of application, or employed by the Government of the Virgin Islands or by the federal government as an auditor, or as an internal revenue agent, or in a position of supervisory responsibility over auditors or internal revenue agents for at least three years preceding the date of application.
Effective May 16, 2020, the only available pathway for licensure will be to obtain a baccalaureate degree and 150 semester hours of education and one year of acceptable experience.
(The ** notation is informational and does not affect a state’s current SE status. At such time as the alternate paths to licensure completely expire and the 3E criteria is the sole path to licensure in these states, the ** notation will be removed. Specific coursework requirements, experience or examination qualification can be found in NASBA’s Accountancy Licensing Library or on the specific state board’s website.)
*** These states currently meet the 3E pathway requirement for substantial equivalency under the UAA, and also have a historic pathway to licensure that can apply in specific cases with explicit board approval.
Non-Substantially Equivalent States
With the passage of legislation in May 2014, Virgin Islands became the last jurisdiction to move from non-substantially equivalent status and be deemed substantially equivalent to the UAA. Should any jurisdiction adopt future legislation, rules or regulations which alter their licensing requirements in a manner that is not compliant with the UAA requirements (150 semester hours of education with accounting concentration, at least one year acceptable experience, and successful completion of the Uniform CPA Examination), that jurisdiction may be found to be non-substantially equivalent by NQAS.
For more information or help with Substantial Equivalency, visit NASBA’s Accountancy Licensing Library.