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Bonnie Moore revisited: seven years later.

Seven years ago, Bonnie Moore, an unlicensed accountant who operated a firm called the "Accounting Center, Inc.," initiated litigation against the California State Board of Accountancy for declaratory relief and injunction. The State Board had ordered her and the Accounting Center, Inc., to cease and desist from using the title "accountant" in referring to herself, the Accounting Center, Inc. or the services she offered to the public. Subsequently, Moore was joined in the litigation by the California Association of Independent Accountants, a non-profit organization of approximately 700 individual members affiliated with the National Society of Public Accountants. As mentioned, Moore is an unlicensed accountant. She possesses a college degree with a major in accountancy. She had previous employment with a "big eight" accounting firm and as comptroller and chief finance officer for a for-profit firm. She met all the educational eligibility qualifications for the CPA examination except for the experience requirement, i.e., the requirement to work for two years in public accountancy under a CPA, which the California accountancy law mandates.

Moore's firm, the Accountancy Center, Inc., was granted a certificate of incorporation by the California Secretary of State. Accounting Center, Inc. primarily designed and installed basic accounting systems for small business clients, a function Moore was completely familiar with not only by academic training but by her years of experience as a comptroller and chief finance officer. Once Accounting Center, Inc. set up a system, bookkeepers supervised the accounts supervised by degreed accountants. Primarily, Moore's firm prepared monthly financial statements and long-range financial projections in furtherance of budgetary control and sound financial management practices.

On July 2, 1992, the California Supreme Court--in a 4-to-3 decision extending over 60 typewritten pages--held that use of the terms "accountant" and "accounting" is constitutionally permissible when used in conjunction with a modifier or caveat that serves to dispel any possibility of confusion that the user is a licensed accountant. An example of a modifier that would dispel confusion would be an express disclaimer stating that the accounting services being offered do not require a license from the Board of Accountancy. A disclaimer that the individual is not licensed by the State Board would appear to serve the same purpose.

Accordingly, the opinion is clear that the California Board of Accountancy may not prohibit absolutely (as the Board had continued to do for a great many years, threatening unlicensed accountants with contempt actions, fines and imprisonment) the right of unlicensed accountants to use the title "accountant" if the unlicensed accountant uses the disclaimer or caveat fashioned by the California Supreme Court.


What has the Bonnie Moore litigation accomplished? The litigation was initiated by Moore and CAIA to free unlicensed accountants from unreasonable restraints upon their ability to inform the public about lawful services they offer by using the generic terms that most accurately describe those services and their status. The Bonnie Moore litigation succeeded in defeating the most egregious feature of the State Board's regulation and policy--namely, the absolute prohibition of undeniably truthful and accurate terms such as "unlicensed accountant" and the use of the term "accounting" in contexts where it is abundantly clear that the user does not claim to be licensed as a CPA or a PA. Stated another way, unlicensed accountants in California gained a new freedom to use the generic terms "accountant" and "accounting" in all contexts consistent with the Court's ruling. The State Board of Accountancy can no longer impose its absolute ban upon a truthful and protected form of commercial speech. LITTLE SUPPORT FOR BAN

Moreover, the State Board did not receive the support of a single member of the California Supreme Court Justices for its long-held but untenable position that unlicensed accountants should be prohibited from all uses of the generic terms regardless of context. The Attorney General representing the State Board argued tenaciously and consistently that the use of the generic terms--even when accompanied by an appropriate modifier or disclaimer--still violated the absolute prohibition of the regulations because the generic terms were inherently misleading. The California Appellate Court and the California Supreme Court both declined to accept that argument. Additionally and importantly, the California Supreme Court reemphasized and distinguished the permissible categories of basic accounting services that unlicensed accountants may offer to the public. The majority decision in no way limited the unlicensed accountants' scope of practice, contrary to the Board's attempt to persuade the trial court to declare "unlawful" the preparation of certain types of financial reports by unlicensed accountants. Thus, the State Board was unsuccessful with respect to every restraint it attempted to impose on unlicensed accountants in the course of the Bonnie Moore litigation. In summary, the Bonnie Moore litigation has produced a significant change in the rules affecting all unlicensed accountants throughout California. They should no longer receive the State Board's "cease and desist" letters or be subject to other threats by the Board--including the threat of administrative fines up to $2.000--if they refer to themselves as "unlicensed accountants" or if they inform the public that they are available to perform accounting services that do not require a license.

A final word about Bonnie Moore, the individual whose self-respect and courage led her to decline to accede to the State Board's cease and desist order. During the seven years the matter was in litigation, Moore decided to make a career change. She entered and completed law school.

There is little doubt that Moore will be a successful lawyer, especially in the defense of an individual whose First Amendment rights are being violated. The experience of seven years of litigation has certainly provided her with the background to be an assertive advocate for her clients.


The first sentence of the December, 1993, Washington Comment should have read as follows: "The Uniform Accountancy Act (the UAA, successor to the AICPA/NASBA joint model accountancy law), finalized in December, 1992, after 18 months under consideration, will be one year old this month."
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Title Annotation:Practitioner Communique
Author:Sager, William H.
Publication:The National Public Accountant
Date:Feb 1, 1994
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