Ethics for Missouri CPAs – 2 Hours

Missouri asks for ethics CPE every calendar year, not every two or three. Since 1 January 2020 a Missouri licensee must complete at least 40 hours of qualifying continuing education in each calendar year they hold a licence, and a minimum of two of those hours must be in ethics. This two-hour course is built for that annual requirement.

The course covers selected statutes of the Missouri Accountancy Act at Chapter 326 of the Revised Statutes, together with the rules of the Missouri State Board of Accountancy at Title 20, Division 2010, Chapters 3 and 4 of the Code of State Regulations, and the AICPA Code of Professional Conduct.

Missouri's starting point is set out in 20 CSR 2010-3.010: the Board adopts the AICPA Code of Professional Conduct and its interpretations, and applies them to every licensee whether or not they belong to the AICPA — but in the event of a conflict between the AICPA Code and Missouri statute or rules, the Missouri statute or rules prevail. Where the Code is written in terms of “should”, a Missouri licensee must follow it as though written in mandatory language unless a justifiable reason for departure exists and is disclosed. The course also covers the position of a licensee practising outside the United States.

From the Accountancy Act, section 326.292 is covered in detail: who may issue a report on financial statements or offer attest services, and the class A misdemeanour that follows a violation; the restrictions on using the CPA title and the titles likely to be confused with it; firm permits and the prohibition on misleading firm names; the safe harbour language a non-licensee may use for compilations and reviews; and the statutory rules on commissions and contingent fees, including the requirement that permitted commissions and referral fees be disclosed in writing.

Rule 20 CSR 2010-3.060 on other responsibilities and practices is covered in full, including the rule that failing to comply with a Board rule or order is itself an act reflecting adversely on fitness to practise; the prohibitions on false or misleading public communication and on solicitation by coercion, duress, intimidation or vexatious conduct; misleading firm names and the two-year window a surviving sole practitioner has; the thirty-day deadline for responding to Board communications; the positive obligation to assist the Board and other practitioners in enforcing the rules; the duty to be candid when testifying as an expert witness even where the testimony damages another licensee; the expectation that a licensee lacking specialist expertise will obtain assistance or refer the engagement; and the four-year retention period for attest documentation, with the warning that failure to maintain it may be deemed an admission that it does not comply with professional standards.

Chapter 4 on continuing education is covered as its own subject: the 40-hour annual requirement and its two ethics hours, the grace period through 1 March to cure a shortage, the position of non-resident licensees, what makes a programme qualify under the NASBA and AICPA Statement on Standards, the nine accepted sources of CPE, the authorship rules including the 750-word formula and two-hour annual cap, the extensive list of professional certifications that earn credit and the hours allowed for each, the five-year documentation retention rule and the thirty-day cure period for disallowed hours, the treatment of inactive, expired and lapsed licences, and the hardship exceptions and waivers available.

The course also carries the Board's guidance following Missouri's Amendment 3 on marijuana legalisation — that the Board will not generally pursue discipline solely because a licensee or firm provides professional services to marijuana businesses operating legally in the state, while cautioning licensees to address the risks arising from federal drug law and the Internal Revenue Code.

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, 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.

Three Missouri case studies apply the rules directly: a fee quoted as the greater of a fixed amount or a percentage of a client's tax refund; a CPA whose only experience is individual tax returns proposing to trade and advertise as Audit Experts; and a CPA who has resigned a difficult client and then receives a Board letter about that client's complaint.

Learning objectives

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

1. Define ethics from an overall and professional perspective.
2. Recognize the ethical standards contained in the Missouri Accountancy Act and the Missouri State Board of Accountancy rules.
3. Recognize the ethical standards contained in the AICPA Code of Professional Conduct.