North Dakota Administrative Code Title 3 - Accountancy, Board of
Overview: Title 3 — Accountancy, Board of
Title 3 of the NDAC pertains to the North Dakota State Board of Accountancy (Board), the regulatory body responsible for overseeing the practice of public accounting within the state. The Board’s primary mission is to protect the public interest by regulating Certified Public Accountants (CPAs) and CPA firms through licensing, enforcement of professional standards, and discipline.
The administrative rules in Title 3 implement provisions of the North Dakota Century Code (NDCC) Chapter 43-02, which governs the licensure and regulation of accountants.
Statutory Authority
The Board’s authority comes primarily from NDCC Chapter 43-02, which establishes the licensing requirements, scope of practice, and disciplinary authority for CPAs.
Title 3 of the NDAC sets forth detailed administrative rules for:
Licensing and certification.
Continuing professional education.
Ethical and professional standards.
Enforcement and disciplinary procedures.
Key Functions and Provisions of Title 3
1. Licensing and Certification
The Board issues licenses to individuals who meet educational, examination, and experience requirements to become Certified Public Accountants (CPAs).
Rules cover:
Eligibility criteria (education, experience).
Application procedures.
Requirements for passing the Uniform CPA Exam.
Requirements for reciprocity and licensure by endorsement for CPAs licensed in other states.
2. Continuing Professional Education (CPE)
Licensed CPAs must complete a specified number of continuing education hours periodically (typically annually or biannually).
Title 3 outlines:
The minimum CPE hours required.
Approved types of courses and activities.
Recordkeeping and reporting obligations for CPE.
Procedures for waivers or extensions under special circumstances.
3. Standards of Professional Conduct
The Board adopts ethical standards consistent with national professional bodies such as the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct.
Rules require CPAs to maintain:
Integrity and objectivity.
Independence in auditing and attestation services.
Confidentiality of client information.
Compliance with applicable auditing and accounting standards.
4. Practice and Firm Registration
CPA firms operating in North Dakota must register with the Board.
The Board regulates firm names, ownership structures, and professional liability insurance requirements.
Firms must adhere to quality control standards consistent with professional guidelines.
5. Enforcement and Discipline
The Board investigates complaints against licensees for:
Professional misconduct.
Violations of ethical standards.
Fraud or dishonesty.
Criminal convictions related to the profession.
The Board may impose sanctions including:
License suspension or revocation.
Monetary fines.
Probation or reprimands.
Administrative hearings and appeal rights are provided under the North Dakota Administrative Procedure Act.
6. Exemptions and Limited Practice
Title 3 defines circumstances under which certain individuals or entities may be exempt from licensure requirements (e.g., government auditors, non-resident practitioners).
Rules clarify when limited practice or temporary permits may be issued.
Relevant Legal Principles and Case Law Context
Case Law Specific to the Board of Accountancy
While specific appellate decisions involving North Dakota’s Accountancy Board are limited, general principles and relevant cases provide guidance:
1. Deference to Professional Regulatory Boards
Courts generally give deference to the expertise and discretion of professional licensing boards in regulating and disciplining practitioners.
For example, in Smith v. State Board of Accountancy (hypothetical name), courts have upheld disciplinary actions where the Board demonstrated reasonable cause and followed due process.
2. Due Process in Disciplinary Proceedings
Licensees have constitutional rights to notice, hearing, and appeal before license suspension or revocation.
In Jones v. North Dakota Board of Accountancy (illustrative), the court emphasized that:
The Board’s findings must be supported by substantial evidence.
The process must comply with the North Dakota Administrative Procedure Act.
Failure to provide proper procedural safeguards can lead to reversal of disciplinary actions.
3. Scope of Practice and Unauthorized Practice
The Board has authority to regulate who may use the CPA title and perform accounting services reserved for licensed CPAs.
Cases have upheld the Board’s power to enjoin unauthorized practice to protect the public.
4. Ethical Standards Enforcement
Professional conduct rules enforced by the Board are generally aligned with national standards.
Violations such as fraud, misrepresentation, or breach of confidentiality justify disciplinary measures.
Courts uphold disciplinary decisions that are consistent with these standards.
Practical Implications for Accountants and Firms
CPAs must strictly adhere to licensure and CPE requirements to maintain good standing.
They must uphold ethical standards and respond promptly to Board inquiries.
Firms must register and comply with operational rules.
Individuals facing disciplinary actions should understand their rights to hearing and appeal.
Summary Table
| Topic | Details |
|---|---|
| Authority | NDCC Chapter 43-02; NDAC Title 3 |
| Licensing | Education, exam, experience, reciprocity |
| Continuing Education | Mandatory CPE hours, reporting, approved courses |
| Ethical Standards | Integrity, objectivity, confidentiality, independence |
| Firm Registration | Registration, naming, insurance, quality control |
| Discipline | Investigations, sanctions, hearings, appeals |
| Due Process | Notice, hearing rights, substantial evidence requirement |
| Case Law | Deference to Board, due process, enforcement of scope and ethics |
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