Private-investigator licensing emerges as potential threat to CPAs

BY JEFF DREW
MARCH 5, 2013
The AICPA has made available to members an online guide detailing which states and cities require CPAs practicing forensic accounting to be licensed as a private investigator.

More than 40 states have enacted laws requiring private investigators to buy a license to operate in their state. Most of those regulations have gone into effect during the past five years, according to research done by the AICPA’s Forensic & Valuation Section.

Based on feedback from AICPA members, the FVS Section believes many CPAs are unaware that they might be breaking state laws regarding P.I. licensing. Penalties for operating as a private investigator without a license vary, but in some states it is a felony.

To spread the word to the CPA community, the FVS Section is making available to AICPA members an online matrix designed to help CPAs determine if the tasks they perform in their practice require them to obtain a private investigator’s license in the states and/or cities in which they do business. The matrix of P.I. licensing requirements for CPAs previously had been available only to FVS members.

While the scope and complexity of P.I.-licensing laws and statutes vary nationwide, they all impose licensing requirements on individuals participating in activities associated with private investigations. Because forensic accountants conduct research- and document-based investigations, they often fall under the purview of these laws. In addition, some CPAs specializing in information technology perform work, such as digging for information in computer files, that could require them to register as private investigators.

The requirements for obtaining a P.I. license, like the penalties for failing to do so, vary greatly by state. In some states, the statutes specifically exempt forensic CPAs from the licensing mandate. In other states, including Virginia, the P.I.-license exemption is extended only to CPAs based in that state. In Virginia, state law mandates that forensic accountants licensed as a CPA in another state must obtain a P.I. license to do work in Virginia regardless of whether their home state has exempted them from such a requirement.

Some CPAs in states that have exempted CPAs from having to procure a P.I. license might believe that mobility laws would carry that protection over to other states. But, as shown in the Virginia example, that is not necessarily the case.

—Jeff Drew (jdrew@aicpa.org) is a JofA senior editor.

Cheating Spouses- Why They Cheat

People cheat for many reasons. Some like the excitement of seeing how far they can go without getting caught. Some want to go after passion they think is lost. Some feel younger and more attractive with someone on the side. Some feel better about themselves if they can take someone away from another, a little like the grass always looks greener on the other side and some are just scum-bags. I’ve worked as a state licensed private investigator for many years. I have seen things that others have only seen in movies. I’ve been asked many times the same questions number one being, who are your most clients, men or women? My answer is about 50/50 and that hasn’t changed. Second question is, should I feel guilty hiring a PI to check out my suspicions? My answer is again the same which is no. If you have reason to be suspicion, there are probably good reasons why. The third question is usually how long does this type of case take? My answer is always this. The length of an investigation and surveillance depends a lot on what the subject and the lover does. For instance, how often they see the other party, if the other party is married also or single, what type of work they do, how many vehicles they have access to drive and if they are on the road a lot going out of town, and of course many other factors. I’ve had cases that were successful within a few days while others took a few weeks. The length of each case is different. Clients need to keep in mind that it’s not necessarily the length of the case they should be concerned about, but that all evidence is obtained correctly by the PI you hire. Anything else is subject to being thrown out of court. Most all my clients ask the question why are they cheating on me? Stating, I’ve been the best wife/husband I could be. Here’s the thing. It’s not you, it really is them. They are the one cheating. Hold your head up and take the appropriate steps to protect yourself and your children. There is life after divorce. I will end on this truthful fact. Discovery Investigations never had any evidence thrown out of any court. Keep in mind that there is a right and wrong way to obtain evidence. Make sure the PI firm you hire is licensed and has some good years of experience behind them. We gladly provide our clients with references from attorneys and other clients that have used us for many years.
Dollie Mason, LPI