Ethics for Montana CPAs – 2 Hours

Montana asks for two hours of ethics within a rolling three-year continuing education period, and this two-hour course is built to that requirement. It covers selected rules of the Administrative Rules of Montana at Title 24, Chapter 201 and selected statutes from the Montana Code at Title 37, Chapter 50, together with the AICPA Code of Professional Conduct.

The Montana material is organised around the four areas the second learning objective names. On licensure of individuals and firms, it covers the use of the CPA and LPA designation — including the rule that an individual whose principal place of business is in Montana and who holds out as a CPA must hold an active licence even where not otherwise in public practice, and that licensees working for non-public accounting employers may not use the designation when presenting reports to outside parties unless the licence is active. It also covers the licensure qualifications, the requirement to complete a professional ethics course for initial licensure, the rule that a current licence must be presented to a client on request, practice privilege for non-resident CPAs and the four conditions attached to it, firm ownership requirements including the simple-majority test and the ninety-day notice a firm must give when it falls out of compliance, and the registration exemption available to out-of-state firms with no Montana office.

On peer review, the course covers which services trigger enrolment — audits, reviews, compilations, examinations, reviews and agreed-upon procedures under the attestation standards, and non-issuer PCAOB engagements not subject to PCAOB inspection — together with the eighteen-month deadline for a firm's initial review, the thirty-day windows for making each peer review document available to the Board through the sponsoring organisation's secure site, and the rule that a licensee need not become a member of the organisation administering the programme.

On continuing professional education, it covers the 120-hour rolling three-year requirement with its two-hour ethics subset, the fifty per cent minimum in technical fields of study, the position of new licensees whose initial licensing year does not count toward the first reporting period, the treatment of practice-privilege holders and non-resident licensees, what qualifies as acceptable programme content and the technical and non-technical fields Montana recognises, the reporting standards and the seven items every certificate of completion must show, the five-year retention rule for both licensee and sponsor, the NASBA CPE audit service used for verification, and the extension and hardship exceptions available.

On inactive and retired status, the course covers the rules that most often catch licensees out. An inactive licensee may not use the title CPA, or even “CPA (inactive)”, and may not practise public accounting in the state, though the licence must still be renewed annually. A retired licensee must be at least sixty years of age or have held a licence in good standing for twenty years in a substantially equivalent jurisdiction, is exempt from CPE, may use the designation “CPA (Retired)”, and may provide volunteer uncompensated tax preparation, government-sponsored business mentoring, and non-profit board service. Neither status is available to a Montana licensee who is using that licence to exercise practice privileges in another jurisdiction. The course also reproduces the Board's own frequently asked questions on these points.

The AICPA Code is then covered across all three of its parts — members in public practice, members in business, and other members — including the conceptual framework of threats and safeguards, integrity and objectivity, preparing and reporting information, responding to noncompliance with laws and regulations, independence with its network firm, financial interest, loan, lease, litigation, staff augmentation and nonattest services provisions and the determining fees and fee dependency interpretations effective January 2025, the general standards, compliance with standards and accounting principles rules, acts discreditable, contingent fees, commissions and referral fees, advertising, confidential client information, and form of organization and name.

The course opens with the reasoning behind the rules, separating morals from ethics and showing where the two diverge, using Prohibition and the Nike contract manufacturing controversy as cases where prevailing moral views pulled ethical standards above what the law required, and setting out the five core foundations of independence, integrity, objectivity, public interest and due care. Case studies include married tax clients going through a divorce, year-end adjustments made with a bank loan covenant in view, an audit engagement accepted without relevant experience, and an audit that peer review found deficient in six respects.

Learning objectives

Upon completion of this course, participants will be able to:

1. Define ethics from an overall and professional perspective.
2. Recognize the Montana regulations governing licensure of individuals and firms, peer review, continuing professional education and inactive and retired statuses.
3. Recognize the ethical standards contained in the AICPA Code of Professional Conduct.