Other Responsibilities and Practices

(1) Discreditable Conduct. A certified public accountant shall not commit any act discreditable to the profession. (2) Solicitation and Advertising. (a) Advertising. Certified Public Accountants may provide information to the public by advertising. Such advertising shall not: 3.05: continued 1. be false, deceptive or misleading; 2. create false or unjustified expectations of favorable results; 3. imply the ability to influence improperly any court tribunal or regulatory agency; 4. fail to disclose all variables and other relevant factors for soliciting professional engagements; or 5. violate M.G.L. c. 93A. (b) Solicitation. Certified Public Accountants may solicit professional engagements by direct communications. Such communications shall not: 1. be false, deceptive or misleading; 2. create false or unjustified expectations of favorable results; 3. imply the ability to influence improperly any court tribunal or regulatory agency; 4. fail to disclose all variables and other relevant factors for soliciting professional engagements; 5. violate M.G.L. c. 93A; or 6. be coercive, intimidating, threatening or overreaching. (3) Commissions. (a) Commission means any item of value given or received by a licensee to or from any third party in return for suggesting the purchase of any product or service. (b) A licensee shall not recommend or refer to a client any product or service in exchange for a commission, recommend any product or service to be supplied by the licensee’s client to a third party, or receive a commission when the licensee or the licensee’s firm also performs for that client: 1. An audit or review of a financial statement; 2. A compilation of a financial statement when the licensee expects or reasonably might expect that a third party will use the financial statement and the licensee’s report does not disclose a lack of independence; or 3. An examination of prospective financial information. (c) The prohibition of 252 CMR 3.05(3)(b) applies during the period in which the licensee is engaged to perform any of the services listed in 252 CMR 3.05(3)(b)1. through 3. and the period covered by any historical financial statements involved in the listed services. (d) A licensee who is not prohibited from receiving a commission and who is paid or expects to be paid a commission shall disclose that fact, in writing, to any person or entity to whom the licensee recommends or refers a product or service to which the commission relates. (e) A licensee who accepts a fee for recommending or referring any service of another licensee to any person or entity or who pays a fee to obtain a client shall disclose, in writing, the receipt or payment of the fee to the client. (f) 252 CMR 3.05(3) shall not prohibit: 1. Payments for the purchase of an accounting practice; or 2. Retirement payments to individuals, and their heirs or estates, who were formerly engaged in the practice of public accounting. (4) Incompatible Occupations. A certified public accountant who is engaged in the practice of public accounting shall not concurrently engage in any business or occupation which impairs his independence or objectivity in rendering professional services. (5) Form of Practice and Name. (a) Form of Practice. A certified public accountant may practice public accountancy only in a proprietorship, partnership, professional corporation, business corporation, limited liability partnership, or limited liability company, organized in accordance with M.G.L. c. 156A, c. 156B or c. 108A. 3.05: continued (b) Firm Names. A certified public accountant shall not practice public accountancy using a professional or firm name which is misleading as to the legal form of the firm or as to the persons who are partners, officers, shareholders or members of the firm, or as to any matter with respect to which public communications are restricted by 252 CMR 3.05(2)(a). A firm name is misleading, and thus prohibited if, among other things: 1. The firm name implies the existence of a corporation when the firm is not a corporation (as by use of the abbreviation “P.C.”); 2. The firm name implies existence of a partnership when the firm is not a partnership; 3. The firm name implies the existence of a limited liability partnership or a limited liability company when the firm is not a limited liability partnership or a limited liability company as duly and validly registered in the Commonwealth of Massachusetts; 4. The firm name includes the name of a person who is neither a present nor a past partner, shareholder, or member of the firm; or 5. The firm name includes the designation “and Associates”, “and Assoc.”, “and Company”, or “& Co.” when there are not in fact at least two owners, or a sole proprietor or single owner CPA firm with at least one licensed full-time employee. Sole proprietors or single owner CPA firms must notify the Board, in writing, identifying the name of the licensed full-time employee for approval of a firm name designating other than the licensee’s name. (c) Fictitious Firm Names. A fictitious firm name is any firm name that does not consist of solely the last names (except that an individual’s first name may be used with the individual’s last name) of the living or deceased natural persons who constitute or constituted of one or more present or former owners of the firm together with any designation of the type of legal entity in which the firm is organized. A firm may not use a fictitious firm name unless: 1. such firm name consists solely of the initials of the last names of living or deceased natural persons who constitute or constituted one or more present or former owners of the firm, or a combination of such initials and the last names of living or deceased natural persons who constitute or constituted one or more present or former owners of the firm, together with any designation of the type of legal entity in which the firm is organized; and 2. such firm name has been registered with and approved by the Board as not being false or misleading, and as not reflecting discredit upon the accounting profession.