Porter Muirhead Cornia & Howard v. State ex rel. Wyoming Board of Certified Public Accountants

844 P.2d 479, 1992 Wyo. LEXIS 196, 1992 WL 379253
CourtWyoming Supreme Court
DecidedDecember 23, 1992
DocketNo. 92-73
StatusPublished
Cited by1 cases

This text of 844 P.2d 479 (Porter Muirhead Cornia & Howard v. State ex rel. Wyoming Board of Certified Public Accountants) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Porter Muirhead Cornia & Howard v. State ex rel. Wyoming Board of Certified Public Accountants, 844 P.2d 479, 1992 Wyo. LEXIS 196, 1992 WL 379253 (Wyo. 1992).

Opinion

URBIGKIT, Justice.

This appeal tests the authority of the Wyoming Board of Certified Public Accountants to adopt regulations requiring that certified public accountants practicing within a corporate business entity “shall remain fully liable and responsible for [their] professional activities, and subject to all rules, regulations, standards and requirements pertaining thereto, as though practicing individually rather than in a corporation.”

I. ISSUES

The basic issue is the regulatory authority of the Wyoming Board of Certified Public Accountants (CPA Board) to require that the professional practitioner retain personal liability for his accounting services, even though acting as a shareholder in a general business corporation.

The particular thrust of appellants’ argument is that the authorization by the legislature for accounting firms to incorporate under the general business corporation statute is inconsistent with the rule adopted by the CPA Board that requires full professional liability for each licensed employee of an accounting corporation. Appellants seek the benefit of limited liability normally associated with a business corporation.

We affirm the decision of the CPA Board, as tested and approved in the declaratory judgment decision of the district court, which justified a requirement that the individual CPA retain the same personal liability when using the corporate entity for the professional practice as is the case for the licensee practicing as an individual.

II. FACTS

Appellant Porter Muirhead Cornia & Howard (Porter Muirhead) commenced practice as a professional corporation, Wyo. Stat. §§ 17-3-101 through 17-3-104 (1989), after passage of the enabling legislation by the Wyoming legislature in 1971. Under that statute, individual liability was maintained and the right for any person to be a shareholder was limited to members practicing in that particular profession.

Changes were made to the CPA licensing statute with the enactment of 1975 Wyo. Sess.Laws ch. 179, Wyo.Stat. §§ 33-3-101 through 33-3-131 (1987). In 1982, based on statutory changes provided in the licensing statute and an Attorney General’s opinion of July 5, 1979, Porter Muirhead amended their corporate structure to change from the professional corporate statute, Wyo.Stat. §§ 17-3-101 through 17-3-104, to create an entity organized under the general corporate business statute1 as permitted by Wyo.Stat. § 33-3-117.2 For the period of 1982 to 1989, Porter Muirhead practiced under the general business corporation statute without any provision for personal liability of its CPA shareholders. In 1990, this deviation from regulations requiring retained personal liability was recognized by the CPA Board with the resulting disagreement producing the litigation now presented for review by this appeal.

[481]*481The clarity of the requirement for retained personal liability found in the present CPA Board rules is not at issue.3 Appellants contend that the rules, as adopted in 1991, are inconsistent with the CPA licensing board statute, Wyo.Stat. §§ 33-3-101 through 33-3-131, and specifically, Wyo.Stat. § 33-3-117, which permits the utilization of the general business corporation structure. Consequently, they argue that the limited liability provisions are ineffective and contrary to the statutory authority. In effect, it is suggested that this licensing statute is different than the criteria provided for in the practice of medicine or in the practice of law with a corporate entity.4

Broad issues of estoppel are advanced to support appellants’ argument of legislative interpretation and administrative agency adaptation based on the Attorney General’s opinion of July 5, 1979. The CPA Board responds that longstanding rules required retained personal liability with any corporate practice of this profession and that accountability should be continued as appropriately validated in the 1991 professional practice rules and regulations.

[482]*482III. DISCUSSION

No one disputes that a career engagement for the certified public accountant is other than a specialized and very professional occupation. Christensen v. Wyoming Bd. of Certified Public Accountants, 838 P.2d 723 (Wyo.1992). The quality and capacity of the individual CPA practitioner is critical to that professional involvement in the broad and consuming business relationships and property and personal liberty interests of the user of accounting services. Christensen, 838 P.2d 723. False reports can cause danger to both the estate and personal liberty of the accountant’s client.5

This court will resolve the complex and well briefed contentions in dispute by two separate and simple conclusions. It is first discerned that the provisions included in the CPA statute, in its 1975 recodification regarding business organizations, did not demonstrate in affirmative intent that obligations for individual liability for mistake or neglect in providing the service should be eliminated. Furthermore, in second concept, we find that the broad authority of the licensing statute, Christensen, 838 P.2d 723, does continue a historical right for the CPA Board to require certificated practitioners to retain personal liability for the accounting services rendered.

A consideration of the next section of the CPA licensing statute, additional to Wyo. Stat. § 33-3-117, relating specifically to corporate practice, is instructive:

(b) A corporation organized for the practice of public accounting may register with the board as a corporation of certified public accountants if it meets all of the following requirements:
⅜ ⅜ ⅝ ⅝ ⅜ sjs
(ii) Each shareholder of the corporation is a certified public accountant of some state in good standing and is principally employed by the corporation or actively engaged in its business;
* * * * * *
(viii) The corporation is in compliance with all board regulations pertaining to corporations practicing public accounting in Wyoming.

Wyo.Stat. § 33 — 3—118(b)(ii) and (viii).

Wyo.Stat. § 33-3-108(a) provides the authority to the CPA Board to adopt rules and grants discretional authority:

(a) The board shall prescribe rules and regulations not inconsistent with the provisions of this act [§§ 33-3-101 through 33-3-131] as it deems consistent with, or required by, the public welfare. The rules and regulations shall include:
* * * * * *
(ii) Rules of professional conduct for establishing and maintaining high standards of competence and integrity for certified public accountants in the profession of public accountancy;
[[Image here]]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
844 P.2d 479, 1992 Wyo. LEXIS 196, 1992 WL 379253, Counsel Stack Legal Research, https://law.counselstack.com/opinion/porter-muirhead-cornia-howard-v-state-ex-rel-wyoming-board-of-certified-wyo-1992.