Texas State Board sues American Express.

The Texas State Board of Public Accountancy has filed a lawsuit against American Express Tax and Business Services Inc. for the practice of public accountancy without a license or registration.

In its suit, the board charges that American Express, although unlicensed and unregistered with it, has been preparing financial statements for the public with language that represents an expertise in accounting. The board also claims that individual licensed CPAs have been preparing the financial statements as company employees and thus are practicing public accountancy through an unregistered entity.

According to William Treacy, TSBPA executive director, the board wants the court to permanently prevent the American Express subsidiary from signing its name to any financial statement that contains any wording, indicating it is an accountant or auditor or that it has expert knowledge in accounting or auditing unless it complies with the state's Public Accountancy Act.

The Texas board earlier this year amended its licensing regulations. Among the new rules is a description of when the CPA designation can be used and which firms are qualified to register with the board as public accounting firms. See "Texas Adopts Rules on CPA Designation; AICPA to Seek Broad Resolution," (JofA, Jul.95, page 26).