Duggins v. North Carolina State Bd. of Certified Public Accountant Examiners

• Decision Date: 24 January 1978
• Docket Number: No. 87,87
• Citation: 294 N.C. 120,240 S.E.2d 406
• Parties: James N. DUGGINS, Jr. v. NORTH CAROLINA STATE BOARD OF CERTIFIED PUBLIC ACCOUNTANT EXAMINERS.
• Court: North Carolina Supreme Court

Page 406

240 S.E.2d 406

294 N.C. 120

James N. DUGGINS, Jr. v. NORTH CAROLINA STATE BOARD OF CERTIFIED PUBLIC ACCOUNTANT EXAMINERS.

No. 87.

Supreme Court of North Carolina.

Jan. 24, 1978.

Daniel W. Donahue, Greensboro, for petitioner-appellant.

Allen, Steed & Pullen, P.A., by Lucius W. Pullen and D. James Jones, Jr., Raleigh, for respondents-appellees.

SHARP, Chief Justice:

This appeal presents three questions: (1) Is Rule (9)(c)(1) of Section II of the Rules of the Board of Certified Public Accountant Examiners (Board) consistent with N.C.Gen.Stats. § 93-12(5) (1975) and thus within the Board's rule-making authority? (2) If so, are the statute and rule prima facie constitutional? (3) If so, have the statute and rule been discriminatively applied to appellant in violation of the due process and equal protection rights guaranteed him by the Fourteenth Amendment and by N.C.Const. art. I, § 19?

As Duggins concedes, the practice of accountancy a profession or calling requiring special knowledge and skill is subject to regulation by the State. In the exercise of its police power, for the purpose of protecting the general public from unqualified and inexperienced accountants, the General Assembly enacted N.C.Gen.Stats., ch. 93 (Chapter 93). See State v. Ballance, 229 N.C. 764, 51 S.E.2d 731 (1949); State v. Scott, 182 N.C. 865, 878, 109 S.E. 789, 797 (1921); 2 Strong's N.C. Index 2d, Constitutional Law § 12 (1967). Section 93-12 of Chapter 93 (G.S. 93-12) created the Board and, inter alia, authorized it to make rules for the examination of applicants seeking certificates of qualification as certified public accountants, to conduct such examinations, and to issue certificates to applicants having the qualifications specified in G.S. 93-12(5). In addition to requirements of citizenship, residence, age, character, and education, this statute specifies at least two years of practical experience, which may be obtained in several ways.

Pursuant to its rule-making authority, the Board promulgated Rule (9)(c)(1) to implement the alternative experience requirements of G.S. 93-12(5). The first alternative specified in the statute is proof by the applicant that he has had "at least two years' experience on the field staff of a certified public accountant or a North Carolina public accountant in public practice." It is this requirement which Duggins claims to have satisfied. As the Board construes this provision the phrase "in public practice" modifies both "a certified public accountant" and "a North Carolina public accountant." Under this construction therefore, whether an applicant's experience be acquired on the field staff of a certified public accountant (C.P.A.) or of a North Carolina public accountant, the accountant must have been in public practice.

It is Duggins' contention that G.S. 93-12(5) requires only "the North Carolina public accountant" (not the C.P.A.) under whom an applicant has worked for two years to be in public practice. Duggins does not contend that Mr. Richard J. Tuggle, the C.P.A. under whose supervision he had worked "more than 50% of his time" for over four years, is engaged in the public practice of accountancy. Mr. Tuggle, in addition to being a C.P.A. in good standing, is a lawyer and a partner in a large law firm engaged in the general practice of law. He, like Duggins, is an attorney specializing in tax matters. Their work for the firm "covers the full gamut of tax-related matters."

The first question we must consider, therefore, is whether the Board's Rule (9)(c)(1) enlarges the experience requirement of G.S. 93-12(5) in excess of its authority. We conclude that it does not. Accordingly, we affirm the decision of the Court of Appeals that G.S. 93-12(5) requires that an applicant for certification who relies upon two years' experience on "the field staff" of a C.P.A. must have worked under a C.P.A. in public practice. This construction effects the intent of Chapter 93 as manifested by both its language and legislative history. Moreover, this construction is the Board's long-standing interpretation of G.S. 93-12(5) and is therefore entitled to "great consideration." MacPherson v. City of Asheville, 283 N.C. 299, 307, 196 S.E.2d 200, 206 (1973).

In attempting to ascertain the legislative intent the task of the judiciary courts resort first to the words of the statute. Stevenson v. City of Durham, 281 N.C. 300, 188 S.E.2d 281 (1972). In interpreting an ambiguous statute, "the proper course is to adopt that sense of the words which promotes in the fullest manner the object of the statute." 73 Am.Jur.2d Statutes § 159 (1974). To determine the sense of the crucial phrases used in the experience requirement of G.S. 93-12(5) which is applicable to Duggins we must look to G.S. 93-1, which declares that the following terms are defined as follows:

"(3) A 'certified public accountant' is a person engaged in the public practice of accountancy who holds a certificate as a certified public accountant issued to him under the provisions of this Chapter.

"(4) A 'public accountant' is a person engaged in the public practice of accountancy who is registered as a public accountant under the provisions of this Chapter.

"(5) A person is engaged in the 'public practice of accountancy' who holds himself out to the public as an accountant and in consideration of compensation received or to be received offers to perform or does perform, for other persons, services which involve the auditing or verification of financial transactions, books, accounts, or records, or the preparation, verification or certification of financial, accounting and related statements intended for publication or renders professional services or assistance in or about any and all matters of principle or detail relating to accounting procedure and systems, or the recording, presentation or certification and the interpretation of such service through statements and reports."

From the foregoing definition it is clear that the term "certified public accountant," as defined in Section (3), incorporates the concept of public practice. A certified public accountant is engaged in the public practice of accountancy if he holds himself out to the public as an accountant prepared and offering to perform any and all the services enumerated in Section (5) above, that is, the services ordinarily rendered by one whose profession is accountancy.

We find nothing in the language of G.S. 93-12(5) to displace the definition in G.S. 93-1 and the concept of a certified public accountant as a person engaged in the "public practice" of accountancy. As Judge Morris succinctly stated in the opinion of the Court of Appeals, "the phrase 'in public practice' as used in that portion of G.S. 93-12(5), which reads 'two years' experience on the field staff of a certified public accountant or a North Carolina public accountant in public practice', is equivalent to the phrase 'public practice of accountancy.' " Duggins v. Board of Examiners, 25 N.C.App. 131, 134, 212 S.E.2d 657, 660.

The requirement that an applicant's experience be on the "field staff" of a C.P.A. further evidences the legislative intent that the accountant under whom he serves his apprenticeship be in public practice. Although the term is not defined in the statute, "field staff" is a common expression understood alike by both laymen and accountants. The word field "has been defined as meaning the sphere of practical operation, as of an organization or enterprise; also the place or territory where direct contacts, as with a clientele, may be made or first-hand knowledge may be gained; sphere of action or place of contest, either literally or figuratively; hence, any scene of operations or opportunity for activity." 36A C.J.S. at 390 (1961).

Duggins asserts that "it is manifestly obvious that the administrative differentiation between C.P.A. aspirants studying under Certified Public Accountants 'in public practice' and those not bears no reasonable, rational relationship to the one constitutionally permissible state objective of Chapter 93 . . . i. e., to insure the capability and fitness of an applicant to practice accountancy." Thus, he contends that a C.P.A. need not be in public practice for his "field staff" to obtain firsthand knowledge of "professional services or assistance in or about any and all matters of principle or detail relating to accounting procedure and systems. . . ." G.S. 93-1(5).

The proposition that the range of experience contemplated by G.S. 93-12(5) will necessarily be acquired by one working with any C.P.A. regardless of the nature of his work or specialization is insupportable. As the Board recognized when it promulgated Rule (9)(c)(1), to achieve the statutory purpose that only competent and experienced applicants be certified, G.S. 93-12(5) must be interpreted as requiring that an applicant's experience not only be received under the supervision of an accountant but that it be in the public field of accountancy. If Mr. Tuggle's activities as a lawyer-C.P.A. were limited entirely to tax litigation no one would seriously contend that Duggins, by working with Tuggle or on his staff, would receive the type of experience which accomplished the purpose of the statute. For obvious reasons, when a profession or calling requires special skill or knowledge, and the General Assembly has specified certain qualifications, training, or experience as a condition precedent to the right to practice that profession or calling, the statutory specifications must be complied with strictly. The General Assembly discovered long ago that to allow the Board to accept "equivalent" experience or educational qualifications in lieu of those specified in the statute would not do. A provision permitting such acceptance, once in the law, was excised by 1951 N.C.Sess. Laws, Ch. 844.

The history of legislation in this State mandating experience in the practice of accountancy for an...