Service by Inactive CPAs as Members of Boards of Directors or Board Committees

Retired CPAs serving on boards of directors of both for-profit and not-for-profit organizations may do so in “retired” or inactive status as long as they are not providing attest or compilation services, and are not the designated financial expert where required by the Sarbanes-Oxley Act of 2002 and its implementing rules. Inactive CPAs may also serve as members of an officially designated committee of the board without being a board member, provided that the committee does not have independent authority to act and instead gives advice to the board for board action. However, inactive CPAs who serve as members of boards or board committees must be aware that services are limited to those they provide to the board as a board or board committee member and do not extend to services performed in any other capacity, such as services provided as an employee of the board.

Inactive CPAs must disclose to the board and to any third parties with whom they communicate on behalf of the board the fact that they are not actively registered or required to take continuing education. Disclosure would be adequate if it reasonably informed both the board and any such third parties that the inactive CPA is acting solely in the capacity of a board member or board committee member and not acting as a CPA, is not registered to practice, and is not required to take continuing professional education (CPE) coursework.

Inactive CPAs may file documents on behalf of the corporation, but they should not include the CPA designation on corporate letterhead, in correspondence, or on forms submitted on behalf of the corporation. However, their licensure as a CPA may be referenced in any biographical information about board members.

Additionally, inactive CPAs should not accept salaries or compensation for providing professional services while not registered. This, however, would not prohibit an inactive CPA from receiving board member compensation that is offered to all board members with similar levels of responsibility and/or time commitment.

Inactive CPAs serving on boards must be careful not to independently engage in providing CPA services to third parties, such that they could be deemed to be practicing. Finally, please be aware that any CPA wishing to change to inactive status must affirmatively notify the NYS Board for Public Accountancy in writing of their intention to do so.

NYS Board of Regents
December 14, 2009
Last Updated: December 14, 2009