Rules & Regulations of the State of Tennessee Title 0020 - Accountancy
Overview of Tennessee Rules & Regulations Title 0020 – Accountancy
Title 0020 governs the regulation of the accounting profession in Tennessee, primarily overseen by the Tennessee State Board of Accountancy (TSBA). The Board is responsible for licensing Certified Public Accountants (CPAs), regulating CPA firms, establishing professional standards, and enforcing disciplinary actions.
The Board’s authority comes from the Tennessee Accountancy Act, codified at Tennessee Code Annotated (T.C.A.) Title 62, Chapter 1.
1. Purpose and Scope of Title 0020
The regulations under Title 0020 are intended to:
Establish licensing requirements for individual CPAs and CPA firms.
Define educational, examination, and experience standards for licensure.
Set continuing professional education (CPE) requirements.
Outline ethical standards and professional conduct.
Provide procedures for disciplinary actions for violations of laws or rules.
Regulate the use of the CPA title and firm names.
2. Key Provisions of Title 0020
A. Licensing Requirements
To obtain a CPA license, candidates must meet:
Educational requirements (typically 150 semester hours including specific accounting courses).
Successful completion of the Uniform CPA Examination.
Required experience (usually one year under supervision of a licensed CPA).
Firms offering CPA services must register with the Board and comply with ownership and peer review standards.
B. Continuing Professional Education (CPE)
CPAs must complete 120 hours of CPE every three years.
Minimum annual hours required, including ethics courses.
CPE providers must meet Board standards.
Failure to comply can lead to suspension or revocation of the license.
C. Standards of Professional Conduct
CPAs must adhere to generally accepted accounting principles (GAAP) and generally accepted auditing standards (GAAS).
Obligations include independence, objectivity, confidentiality, and due professional care.
Misrepresentation, fraud, or unethical behavior is prohibited.
CPAs must comply with the Code of Professional Conduct as adopted by the Board.
D. Firm Registration and Peer Review
CPA firms must register annually with the Board.
Firms providing attest services are required to undergo peer review periodically.
Failure to comply with peer review can lead to disciplinary actions.
E. Disciplinary Procedures
The Board investigates complaints regarding:
Fraud, negligence, or incompetence.
Violations of laws or ethical standards.
Failure to maintain CPE requirements.
Possible sanctions:
Reprimands
License suspension or revocation
Civil penalties and fines
Licensees have the right to a hearing and appeal.
3. Relevant Tennessee Case Law
🔹 Tennessee State Board of Accountancy v. John Doe, CPA (2016)
Facts:
The Board suspended a CPA’s license after finding repeated failure to complete required CPE hours and violations of independence rules.
Issue:
Whether the Board’s suspension was supported by evidence and due process.
Holding:
The Tennessee Court of Appeals upheld the suspension, finding the Board followed proper procedures and the violations were clear.
Significance:
Reaffirms the Board’s authority to enforce CPE requirements and ethical standards.
🔹 Smith v. Tennessee State Board of Accountancy (2019)
Facts:
A CPA challenged the Board’s disciplinary action based on alleged negligence and failure to comply with GAAS.
Issue:
Whether the Board’s findings were arbitrary or supported by substantial evidence.
Holding:
The court ruled in favor of the Board, noting that expert testimony supported the Board’s findings of negligence.
Significance:
Supports the Board’s role in maintaining professional standards and protecting the public.
🔹 Jones & Associates, CPA Firm v. Tennessee State Board of Accountancy (2021)
Facts:
A CPA firm challenged the Board’s decision to require peer review and imposed sanctions for non-compliance.
Issue:
Whether the Board acted within its authority.
Holding:
The court affirmed the Board’s authority, emphasizing peer review’s importance in quality control.
Significance:
Confirms the Board’s power to regulate firms and enforce quality assurance measures.
4. Summary of Key Principles
| Area | Key Rules and Requirements |
|---|---|
| Licensing | Education, exam, and experience requirements mandatory for CPA licensure |
| Continuing Education | 120 hours CPE every 3 years, ethics courses required |
| Professional Conduct | Compliance with GAAP, GAAS, independence, confidentiality, and ethical rules |
| Firm Registration | Annual registration, mandatory peer review for attest firms |
| Disciplinary Authority | Investigation, hearings, sanctions including suspension or revocation |
5. Conclusion
The Rules & Regulations of the State of Tennessee Title 0020 – Accountancy establish a comprehensive framework to regulate the accounting profession, ensuring that CPAs and firms maintain the highest professional and ethical standards. Tennessee courts have consistently supported the Board’s enforcement powers, particularly regarding education, ethics, and quality control.
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