A bill introduced in the Connecticut legislature would allow CPA firms to have non-CPAs as partners.
Most states around the country already permit non-CPA partners at firms, but Connecticut remains one of the few remaining holdouts. The bill has the support of the Connecticut Society of CPAs, along with the state Board of Accountancy and Secretary of State Denise Merrill, according to the Hartford Business Journal.
The Big Four firms are the main proponents of the bill. CPA firms point out that it is difficult to recruit high-level employees from other states who are not CPAs unless they can offer the inducement of firm partnership one day. In Connecticut, where many of the largest employers are insurance companies such as Aetna and Cigna, the firms that service them need to hire actuaries, and the promise of making partner helps with recruitment efforts.
So far, 46 states permit non-CPAs to become equity partners in firms, allowing firms to hire more experts at tax, audit, financial planning, technology and consulting functions. New York and Delaware are two of the other holdouts, but with Connecticut allowing non-CPA partners, they may need to change their rules too.
In the Connecticut bill, non-CPAs would be allowed to own up to 49 percent of firm equity, and they would need to be actively engaged in the work of the firm.
Critics point out that by allowing non-CPA firm partners, larger companies would be able to gain control of the firms, but as long as more than 50 percent is owned by CPAs, there is not much likelihood of that happening. There don’t appear to be major sources of opposition to the Connecticut bill right now, which is currently awaiting action in the House.
Like the CPA mobility laws, which have been passed in most states thanks to the efforts of the American Institute of CPAs and state CPA societies, non-CPA firm partnership laws have become increasingly prevalent, changing the face of the accounting profession.