BONNIE MOORE et al., Plaintiffs, Cross-defendants and Appellants, v. CALIFORNIA STATE BOARD OF ACCOUNTANCY, Defendant, Cross-complainant and Respondent.
No. S017399
Supreme Court of California
July 2, 1992
2 Cal. 4th 999
Kronick, Moskovitz, Tiedemann & Girard, Leonard M. Friedman and Ralph C. Alldredge for Plaintiffs, Cross-defendants and Appellants.
Robert C. Fellmuth, Julianne B. D‘Angelo, Gerald J. Thain, William H. Sager and James G. Seely as Amici Curiae on behalf of Plaintiffs, Cross-defendants and Appellants.
John K. Van de Kamp and Daniel E. Lungren, Attorneys General, and Wilbert E. Bennett, Deputy Attorney General, for Defendant, Cross-complainant and Respondent.
OPINION
BAXTER, J.—We granted review in this case to determine whether persons unlicensed by the State Board of Accountancy (Board), the public agency charged with administering the regulatory scheme governing the profession of public accountancy in California (
In contrast, unlicensed persons may offer to the public only a limited category of basic accounting services when performed “as a part of bookkeeping operations.” (
California‘s statutory scheme reserves the practice of public accountancy to the Board‘s licensees—persons who have been certified as qualified to offer and perform the full gamut of accounting services, and whose educational, experience, and ethical qualifications have been established as a prerequisite to licensing. To protect members of the public from the unlicensed practice of public accountancy,
I
FACTS AND PROCEDURAL BACKGROUND
In 1986, appellants Bonnie Moore, an unlicensed individual, Accounting Center, a California corporation of which Moore is president, and the California Association of Independent Accountants (CAIA), a nonprofit membership organization affiliated with the National Society of Public Accountants (NSPA), collectively filed suit against respondent Board for declaratory relief and a permanent injunction. (
After its demurrer to the complaint was overruled, respondent Board filed an answer and a cross-complaint for injunctive relief against the named
During the ensuing court trial, evidence was introduced establishing that Moore possesses a college degree with a major in accounting. She has never taken the examination to become a certified public accountant (CPA), nor is she interested in doing so. Respondent Board concedes she meets the educational eligibility requirements for the CPA examination, but not the experience requirement for licensure. As a practical matter, in order to satisfy the latter requirement—two years of public accounting experience under the supervision of a licensed accountant (
Accounting Center primarily designs and installs basic accounting systems for small business clients. Once the system is set up, bookkeepers service the accounts, supervised by degreed accountants. The firm prepares monthly financial statements and long-range financial projections for its clients in furtherance of budgetary control and sound financial management practices. In a generic sense, the firm “audits” its client‘s books for internal purposes, although it does not produce formal signed audits. Moore conceded she is not qualified to perform the type of formal audits that a CPA does, nor is she qualified to perform services that require a certification of financial statements.
Moore uses the terms “accountant” and “accounting” to describe herself and her services in 90 percent of her advertising. She refers to her business on building directories, in the telephone directory, and in radio and television advertising as “Accounting Center.”
Like Moore, none of the various officers or members of CAIA who testified at trial have ever passed the CPA examination. Ronald Duffin, a former president of CAIA, operates an accounting and tax service. Edwin Greenstreet, another former president of CAIA, operates a tax, accounting
In January 1987, after respondent Board had unsuccessfully demurrered to appellants’ complaint and filed its answer, the Board, through its counsel, the Office of the California Attorney General, contacted the Field Research Corporation, an independent opinion research firm that conducts the California Poll, an ongoing survey of Californians that attempts to measure public attitudes on various unrelated topics. All results from the polls are made public. The Attorney General sought to determine the public‘s perception of whether a person is licensed by the State of California when that person holds himself or herself out as an “accountant” ready and able to offer “accounting services.” To this end, the following two questions were included in the April 1987 California Poll: (1) “Do you think that persons who refer to themselves as accountants in advertising to the public are required to be licensed by the State of California?,” and (2) “Do you think persons who advertise accounting services to the public are required to be licensed by the State of California to offer such services?”
The results of the poll with respect to the first question indicated that 55 percent of those surveyed believed that a person who advertised as an “accountant” had to be licensed, 26 percent did not believe a license was required, and 19 percent did not know. The results of the second question indicated that 53 percent believed that a person who advertised “accounting services” to the public was required to be licensed by the state, 29 percent did not believe a license was required, and 18 percent did not know.
Appellants introduced expert testimony in an effort to establish the ordinary meaning and usage of the terms “accountant,” “accounting,” and “bookkeeping.” Dr. Maurice Moonitz, Accounting Professor Emeritus at the University of California, testified that over the years “double entry bookkeeping,” a “fairly simple recording technology” by which business transactions are recorded, evolved into the field now commonly known as accounting. Today, according to Moonitz, the accounting profession, which he characterizes as the “umbrella term,” has absorbed the basic recording or bookkeeping functions which, in years past, were performed by “bookkeepers.” Traditionally, the bookkeeper would identify the transactions that are taking place, and then record the transactions according to a “predesigned pattern” or system of recordation. Today, the accountant “would probably be the one who designed the system in the first place,” and “would take over the financial statements, preparation of those, because then those would need
At the completion of trial, the court entered judgment denying relief to appellants, and granting respondent Board‘s request for a permanent injunction enjoining appellants from “[u]sing the words ‘accountant,’ ‘accounting,’ or ‘accounting services’ in referring to themselves, their businesses or their services in the context of holding themselves out to the public in the offering or rendering of professional services, or representing themselves as ‘accountants’ in any other manner which would tend to mislead or confuse the public.”
This appeal followed. The Court of Appeal, relying in part on the only California case to have considered whether use of the terms at issue here may be banned—People v. Hill (1977) 66 Cal.App.3d 320 (Hill)—concluded the statutory scheme prohibited an unlicensed person from holding himself or herself out to the public as an “accountant,” or as a person otherwise qualified to provide “accounting services” for compensation. Crediting the California Poll survey evidence introduced by respondent Board, the Court of Appeal found that “the terms ‘accountant’ and ‘accounting,’ standing alone, are misleading to the public and may not be utilized by unlicensed persons.”
The Court of Appeal went on to observe that the Hill court (supra, 66 Cal.App.3d 320), in upholding the preliminary injunction before it in that case, did not reach or consider the constitutional limitations called into play by the United States Supreme Court‘s commercial speech decisions of the past decade. The Court of Appeal therefore proceeded to reach the constitutional issue, concluding that the high court‘s commercial speech cases “make it clear that to satisfy the First Amendment, we must permit the use of [the generic terms] if they are qualified by a warning or disclaimer that avoids their misleading impact.” The Court of Appeal concluded, “While we do not intend to dictate the language which would be acceptable, it is obvious that the term ‘unlicensed accountant,’ for instance, is not misleading. Thus, the judgment and injunction in this case must be modified to prohibit only the use of the terms ‘accountant’ or ‘accounting’ without a modifier, qualifier, disclaimer, or warning stating either that the advertiser is not licensed by the state or that the services provided do not require a state license.”
Appellants urge this court to reverse the Court of Appeal decision. They contend that the key statute,
Appellants further contend that the California Poll survey evidence introduced by respondent below established, at best, only that use of the generic terms “accountant” or “accounting” by unlicensed individuals is potentially misleading to the public. Although appellants concede that a state may implement a less restrictive alternative than an outright ban in order to remedy the harmful effects on the public of potentially misleading professional advertising, they urge that such is a legislative prerogative, that California‘s Legislature has never implemented any such regulation, and that a court may not “rewrite” a statute absent clear legislative intent.2
Respondent in turn argues Hill was correctly decided and should be deemed controlling here, i.e., that the use of the terms “accountant” or “accounting,” whether qualified or standing alone, by unlicensed persons offering their services to the public for compensation, is statutorily prohibited. In particular, respondent points to the language of
Respondent contends the Accountancy Act, thusly construed, passes constitutional muster. Relying on the California Poll survey evidence which, respondent claims, established that an unlicensed person‘s use of the generic terms in fact misleads the public, respondent concludes the use of such titles
II
At the threshold, it is undisputed that the Legislature, in the public interest and in furtherance of the general welfare, is empowered to regulate the profession of public accountancy. (See, e.g., 1 Am.Jur.2d, Accountants (1962) § 2.) California‘s first entry into the regulation of the profession came in 1901, when the Legislature established a five-member State Board of Accountancy, and vested in it the power to examine applicants, and grant certificates of qualification to practice public accountancy. (Stats. 1901, ch. 213, p. 645.) The regulatory scheme underwent a major revision in 1945, and the Board was expanded to seven members. (Stats. 1945, ch. 1353, § 2, pp. 2529-2545.) Presently, the Board consists of 12 members, 8 of them state-licensed accountants, and 4 public members. (
Under the present California licensing scheme, certified public accountants must satisfy rigorous educational, experience, and examination requirements prior to obtaining licensure. Applicants must take and pass a written examination in accounting theory and practice, auditing, commercial law as affecting accountancy, and other related subjects. (
In contrast, the Board‘s enforcement activities against unlicensed persons engaged in the practice of public accountancy are limited to responding to those consumer complaints over which it has jurisdiction. It has jurisdiction over complaints involving unlicensed persons holding themselves out to the public as licensed accountants. It has no jurisdiction over complaints involving the quality of “accounting” work or services performed by nonlicensees.
Accordingly, for purposes of our analysis herein, the term “unlicensed person” includes any person who does not hold a valid permit issued by the Board to practice public accountancy. It includes persons, like appellant Bonnie Moore, who, the Board concedes, can meet the educational eligibility requirements for the CPA examination but not the experience requirement for licensure. It would also include persons without any formal educational background or experience in the accounting profession whatsoever, who nonetheless attempt to seek compensation from members of the public for the rendering of “accounting” services. And it would include a former Board licensee who, due to a breach of professional ethics or the commission of a crime or act of fraud or dishonesty, has had his or her license revoked by the Board. All such persons, although unlicensed, may nonetheless seek to offer to the public for compensation a limited category of basic accounting services “as a part of bookkeeping operations.” (
With this background in mind, we turn to the principal statute at issue in this case,
Appellants urge us to invoke the principle of statutory construction known by the Latin names ejusdem generis and noscitur a sociis, that when
Appellants point to the fact that
Respondent urges us to instead focus on
In construing a statute a court‘s objective is to ascertain and effectuate the underlying legislative intent. (People v. Woodhead (1987) 43 Cal.3d 1002, 1007.) This fundamental rule overrides the ejusdem generis doctrine, just as it would any maxim of jurisprudence, if application of the doctrine or maxim would frustrate the intent underlying the statute. (
We are not persuaded that the approach of either party is consistent with the legislative intent reflected in
We agree with appellants, however, that
Inasmuch as enforcement of the provisions of the Accountancy Act, including
In 1948, the Board exercised its authority to identify other potentially misleading designations that were subject to the catchall prohibition of what was then section 5065 (the predecessor statute to
Ҥ 2 Confusing Titles
“The following are titles or designations likely to be confused with the titles Certified Public Accountant and Public Accountant within the meaning of Section 5058 of the Business and Professions Code:
“(a) ‘Accountant,’ ‘auditor,’ ‘accounting,’ or ‘auditing,’ when used either singly or collectively or in conjunction with other titles.
“(b) Any other titles or designations which imply that the individual is engaged in the practice of public accountancy.”
In considering whether Regulation 2 is a valid exercise of the Board‘s power to adopt regulations necessary for the administration of the Accountancy Act, and in particular
The promulgation of Regulation 2, which implements the catchall language of
The following two questions were asked of those responding to the poll: (1) “Do you think that persons who refer to themselves as accountants in advertising to the public are required to be licensed by the State of California?,” and (2) “Do you think persons who advertise accounting services to the public are required to be licensed by the State of California to offer such services?”
The results of the poll with respect to the first question indicated that 55 percent of those surveyed believed a person who advertised as an “accountant” had to be licensed, 26 percent did not believe a license was required, and 19 percent did not know. The results of the second question indicated
The survey responses, at the very least, support the inference that members of the public who believe that licensing is required would assume that a person who uses the title “accountant” and the designation “accounting” to describe the services offered is licensed by the state.6
In a somewhat analogous context—attorney advertising—it has been observed that special considerations apply to advertising by professionals: “[I]t has been noted that special considerations apply to advertising by lawyers because they ‘do not dispense standardized products; they render professional services of almost infinite variety and nature, with the consequent enhanced possibility for confusion and deception if they were to undertake certain kinds of advertising.’ (Va. Pharmacy Board. v. Va. Consumer Council (1976) 425 U.S. 748, 773, fn. 25.) This
As the court in Texas State Board of Public Accountancy v. Fulcher (Tex.Civ.App. 1974) 515 S.W.2d 950 observed nearly two decades ago: “[T]he need to protect the public against fraud, deception [and] the consequences of ignorance or incompetence in the practice of most professions makes regulation necessary. The state may exact the requisite degree of skill and learning in professions which affect the public, or at least a substantial portion of the public, such as the practice of law, medicine, engineering, dentistry, and many others. The [accountancy] Act before us recognizes public accountancy as one of such professions. Public accountancy now embraces many intricate and technical matters dealing with many kinds of tax laws, unfair trade practices, rate regulations, stock exchange regulations, reports required by many governmental agencies, financial statements and the like.” (Id., at pp. 954-955.)
These observations apply with even more force to the practice of the profession of public accountancy in the 1990‘s. We conclude that the Board‘s determination, embodied in Regulation 2, that the terms “accountant” and “accounting” are titles or designations likely to be confused with the official titles denoting licensure, is consistent with the intent and purpose behind
As further evidence that Regulation 2 is consistent with the legislative intent behind
Such a presumption should also be applied on a showing that the construction or practice of the agency has been made known to the Legislature. (Robinson v. Fair Employment & Housing Com., supra, 2 Cal.4th at p. 235, fn. 7; Pacific Greyhound Lines v. Johnson (1942) 54 Cal.App.2d 297, 303.) To this end we note that in 1965, an assemblyman from the Third Assembly District requested an opinion from the California Attorney General as to whether a member of the public, who is not licensed as a certified public accountant or public accountant to practice accounting in California, is in violation of the Accountancy Act when he or she uses the word “accounting” on a building directory or on an office door. The Attorney General‘s conclusion was that: “The use of the word ‘accounting’ on a building directory and an office door by an unlicensed individual is a representation to the public that such individual is skilled in accounting and that the user is qualified and ready to perform professional services. Such a representation by an unlicensed individual is in violation of the Accountancy Act. . . .” (46 Ops.Cal.Atty.Gen. 140, 141 (1965).)
Finally, the Legislature may also be presumed to have been aware of the decision filed in 1977 in Hill, supra, 66 Cal.App.3d 320, the only published California case to have addressed the right of an unlicensed person to use the terms in issue here. The Hill court concluded that use of a business name “A-Accounting—Jack M. Hill & Co.” violated
The Hill court recognized that an unlicensed person is permitted by law to offer certain basic accounting services to the public for compensation when offered in connection with bookkeeping operations (see
In sum, we conclude that by inclusion of the catchall language in
III
The Court of Appeal in this case reached substantially the same conclusion in construing the scope of
Respondent urges that
“Commercial speech doctrine, in the context of advertising for professional services, may be summarized generally as follows: Truthful advertising related to lawful activities is entitled to the protections of the First Amendment. But when the particular content or method of the advertising suggests that it is inherently misleading or when experience has proved that in fact such advertising is subject to abuse, the States may impose appropriate restrictions. Misleading advertising may be prohibited entirely. But the States may not place an absolute prohibition on certain types of potentially misleading information, e.g., a listing of areas of practice, if the information may also be presented in a way that is not deceptive. Thus, the Court in Bates [v. State Bar of Arizona, supra, 433 U.S. 350] suggested that the remedy in the first instance is not necessarily a prohibition but preferably a requirement of disclaimers or explanation. 433 U.S., at 375. Although the potential for deception and confusion is particularly strong in the context of advertising professional services, restrictions upon such advertising may be no broader than reasonably necessary to prevent the deception.” (In re R. M. J., supra, 455 U.S. at p. 203 [71 L.Ed.2d at p. 74].)
The high court‘s most recent commercial speech decisions have consistently applied the holding of In re R. M. J., supra. Thus, in Peel v. Attorney Disciplinary Comm‘n of Ill. (1990) 496 U.S. 91 [110 L.Ed.2d 83, 110 S.Ct. 2281], it was held that an attorney holding a “Certificate in Civil Trial Advocacy” from the “National Board of Trial Advocacy” could not be enjoined by the State of Illinois, which had no similar officially sanctioned certification program of its own, from advertising on his letterhead the truthful fact of his “certification” by that organization. Following its decisions in Bates v. State Bar of Arizona, supra, 433 U.S. 350, and In re R. M. J., supra, 455 U.S. 191, the court concluded that Attorney Peel‘s letterhead was entitled to First Amendment protection since the facts stated thereon were “true and verifiable.” (496 U.S. at p. 100 [110 L.Ed.2d at p. 94, 110 S.Ct. at p. 2288].)
The high court in Peel explained further: “Even if we assume that petitioner‘s letterhead may be potentially misleading to some consumers, that potential does not satisfy the State‘s heavy burden of justifying a categorical prohibition against the dissemination of accurate factual information to the public. In re R. M. J., [supra,] 455 U.S., at 203.” (Peel v. Attorney Disciplinary Comm‘n of Ill., supra, 496 U.S. at p. 109 [110 L.Ed.2d at p. 100, 110 S.Ct. at p. 2292].) The court went on to conclude:
“To the extent that potentially misleading statements of private certification or specialization could confuse consumers, a State might consider screening certifying organizations or requiring a disclaimer about the certifying organization or the standards of a specialty. In re R. M. J., [supra,] 455 U.S., at 201-203. A State may not, however, completely ban statements that are not actually or inherently misleading. . . .” (Peel v. Attorney Disciplinary Comm‘n of Ill., supra, 496 U.S. at p. 110, fn. omitted [110 L.Ed.2d at pp. 100-101, 110 S.Ct. at pp. 2292-2293]; accord Bates v. State Bar of Arizona, supra, 433 U.S. at p. 384 [53 L.Ed.2d at p. 836]; Va. Pharmacy Board v. Va. Consumer Council, supra, 425 U.S. 748, 771-772 [48 L.Ed.2d 346, 363-365].)10
We believe the Maryland Court of Appeals in Comprehensive, etc. v. Maryland State Bd. (1979) 284 Md. 474 [397 A.2d 1019, 4 A.L.R.4th 1188], correctly applied the commercial speech principles first announced by the high court in Va. Pharmacy Board v. Va. Consumer Council, supra, 425 U.S. 748, and Bates v. State Bar of Arizona, supra, 433 U.S. 350, to the arena of state regulation of the profession of accountancy. In that case, the Comprehensive Accounting Service Company, which did not hold an enrollment
Invoking the rationale of the United States Supreme Court‘s decisions in Va. Pharmacy Board v. Va. Consumer Council, supra, 425 U.S. 748, and Bates v. State Bar of Arizona, supra, 433 U.S. 350, the Comprehensive court concluded that the State of Maryland could not, consistent with the First Amendment, completely suppress the dissemination of truthful information about an entirely lawful business activity. (Comprehensive, etc. v. Maryland State Bd., supra, 397 A.2d at pp. 1023-1027.) But the Comprehensive court also acknowledged the high court‘s recognition in Va. Pharmacy Board v. Va. Consumer Council, supra, and Bates v. State Bar of Arizona, supra, that, “‘in some cases it may be “appropriate to require that a commercial message appear in such a form, or include such additional information, warning, and disclaimers as are necessary to prevent its being deceptive.“‘” (397 A.2d, at p. 1025, quoting Va. Pharmacy Board v. Va. Consumer Council, supra, 425 U.S. at pp. 771-772, fn. 24.)
As the rulings by the United States Supreme Court in Va. Pharmacy Board v. Va. Consumer Council, Bates v. State Bar of Arizona, In re R. M. J., and Peel v. Attorney Disciplinary Comm‘n of Ill., all supra, make clear, in order to satisfy the First Amendment, appellants must be permitted to use the terms “accountant,” “accounting,” or “accounting services,” if the use of those terms is further qualified by an explanation, disclaimer or warning stating that the advertiser is not licensed by the state, or that the services being offered do not require a state license, thereby eliminating any potential or likelihood of confusion regarding those terms.
In sum,
IV
The trial court‘s judgment and injunction provided, in pertinent part: “Plaintiffs and Cross-Defendants . . . who are not licensed as certified public accountants or public accountants are hereby permanently enjoined directly or indirectly from engaging in any of the following acts or practices: . . . [¶] b. Engaging in the practice of public accountancy without prior compliance with the requirements of
Appellants contended on appeal that the trial court exceeded its authority in holding the preparation of compilation reports, review reports and audit reports by unlicensed persons to be illegal. The Court of Appeal agreed, explaining that the Board had never alleged in its cross-complaint that appellants were engaged in such illegal activities, and presented no evidence at trial to establish that such activities are illegal; hence, the trial court erred in rendering judgment outside the issues raised by the pleadings or at trial. (7 Witkin, Cal. Procedure (3d ed. 1985) Judgment, § 30, p. 472.) In its answer to the petition for review, respondent Board has asked this court to further consider whether the Court of Appeal erred in this regard.
We agree with the conclusions of the Court of Appeal respecting the procedural bar. In any event, the trial court‘s injunction, as worded, is erroneous; unlicensed persons are permitted to make “audits” and prepare “reports,” when such is performed “as a part of bookkeeping operations.” (
V
The judgment of the Court of Appeal is affirmed.
Lucas, C. J., Panelli, J., and Arabian, J., concurred.
On the first of these issues, the State Board of Accountancy (Board) in issuing regulations to effectuate the Accountancy Act (Cal. Code Regs., tit. 16, § 2, hereinafter Regulation 2) prohibits what the statute permits. That is,
In the face of specific statutory authorization, the Board has in Regulation 2 prohibited unlicensed persons to hold themselves out as accountants or as performing accounting services. The majority uphold this anomalous result by which a truthful representation specifically sanctioned by statute is labelled as misleading to the public.
Indeed, the holding of the majority would render improper a representation by an unlicensed person couched in the specific words of
Nor do I agree with the majority‘s analysis of the purpose of
The majority fail to mention that every jurisdiction but one that has considered the issue before us has held, on either statutory or constitutional
I have serious doubts also whether the majority‘s conclusion complies with the First Amendment of the federal Constitution or with the California Constitution. While Peel v. Attorney Disciplinary Comm‘n of Ill. (1990) 496 U.S. 91, 109-110 [110 L.Ed.2d 83, 100, 110 S.Ct. 2281, 2292-2293], does hold that some form of disclaimer may be required if commercial speech would be misleading without it, it also warns that the state has a “heavy burden of justifying a categorical prohibition against the dissemination of accurate factual information to the public.” (Ibid.; see also Anderson v. Department of Real Estate (1979) 93 Cal.App.3d 696 [155 Cal.Rptr. 307].) As we point out above, the unadorned designations “accountant” and “accounting” are accurate as applied to unlicensed persons. The state‘s interest in preventing misrepresentation can be met by prohibiting persons who are not certified public accountants or public accountants to advertise themselves as such, or to use terms that indicate they have been licensed by the state, rather than insisting upon an express disclaimer, as the majority gratuitously require.
Furthermore, Regulation 2 is itself of questionable validity. In 1948, at the time it was adopted, the Board consisted entirely of licensed accountants. (Stats. 1945, ch. 1353, § 2, p. 2530.) The membership of the Board was broadened in 1961 to include public members (Stats. 1961, ch. 1821, § 39, p. 3877); presently, it consists of 12 persons, 8 of them accounting professionals licensed by the state, and 4 public members. (
One additional point needs to be made. Court opinions should not rely on public opinion polls to support their conclusions. Judicial integrity suffers when judges hold a finger up to see which way the wind is blowing. Indeed, I doubt that poll results--which are notoriously inaccurate--should be admitted in evidence. (There may be one exception, however: in change of venue motions in criminal cases, surveys are often used merely to reveal if the crime, the victim and the alleged perpetrator are generally known in the community in which the case is to be tried.)
I would reverse the judgment of the Court of Appeal.
GEORGE, J.--I respectfully dissent.
The majority affirms a judgment granting a permanent injunction enjoining appellants from referring to themselves as “accountants” or describing the services they offer as “accounting.” Appellants include Bonnie Moore, who possesses a college degree with a major in accounting, and officers and members of the California Association of Independent Accountants, a nonprofit membership organization affiliated with the National Society of Public Accountants. I would reverse the judgment.
As explained more fully below, the Legislature has not required that all accountants be licensed. Instead, it has defined a special class of accountants comprised of certified public accountants and public accountants who exclusively are authorized to perform certain types of accountancy and thus must be licensed. Other accountants are prohibited by Business and Professions Code section 50581 and related statutes from using these titles, or similar titles that might be confused with these titles.
The majority acknowledges that unlicensed accountants may perform basic accounting services, but holds that such persons may not call themselves “accountants” or describe the services they offer as “accounting.” This holding is not based upon the language of section 5058, which does not expressly prohibit use of the terms “accountant” and “accounting” by unlicensed accountants, but upon a regulation promulgated by the Board of
I would hold that the Legislature has authorized unlicensed accountants to perform a wide range of accounting services and did not intend to prohibit such persons from accurately referring to themselves as accountants or describing the services they provide as accounting. Because an administrative regulation may not expand the scope of the statute it purports to enforce, the Board lacked the authority to alter this statutory scheme by prohibiting unlicensed accountants from using the terms “accountant” and “accounting.” Accordingly, I find it unnecessary to consider the impact of the First Amendment on this issue. (Ashwander v. Valley Authority (1936) 297 U.S. 288, 347 [80 L.Ed. 688, 711, 56 S.Ct. 466].)
“Pursuant to established principles, our first task in construing a statute is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, a court must look first to the words of the statute themselves, giving to the language its usual, ordinary import and according significance, if possible, to every word, phrase and sentence in pursuance of the legislative purpose. A construction making some words surplusage is to be avoided. The words of the statute must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent possible. [Citations.]” (Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1386-1387 [241 Cal.Rptr. 67, 743 P.2d 1323].)
A license is not required to practice “accountancy” in this state, but only to practice “public accountancy” as that term is defined. (
Section 5051 provides, in part, that an accountant is not engaged in the practice of public accountancy and, thus, does not require a license, if he or
Section 5052 provides that an unlicensed accountant may “contract[] with one or more persons, organizations, or entities, for the purpose of keeping books, making trial balances, statements, making audits or preparing reports, all as a part of bookkeeping operations, provided that such trial balances, statements, or reports are not issued over the name of such person as having been prepared or examined by a certified public accountant or public accountant.”
Sections 5055 and 5056 state that no person other than a certified public accountant (C.P.A.)4 or public accountant (P.A.)5 may use those titles or any other title or designation “tending to indicate” that the person is a C.P.A. or P.A.
What the foregoing statutes expressly prohibit is the use by unlicensed accountants of the titles C.P.A. or P.A., or any title or designation likely to be confused with C.P.A. or P.A. The latter titles are reserved for those accountants who are licensed to perform types of accountancy which unlicensed accountants may not perform. But the Legislature did not require that all accountants be licensed and, consistently, did not prohibit unlicensed accountants from using the title “accountant.”
This interpretation of section 5058 is supported by one of the basic tenets of statutory construction, the principle of ejusdem generis, which instructs that “‘“‘where general words follow the enumeration of particular classes of persons or things, the general words will be construed as applicable only to persons or things of the same general nature or class as those enumerated. [It] is based on the obvious reason that if the [writer] had intended the general words to be used in their unrestricted sense, [he or she] would not have mentioned the particular things or classes of things which would in that event become mere surplusage.‘” [Citations.]‘” (Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d 1142, 1160 [278 Cal.Rptr. 614, 805 P.2d 873], fn. omitted.) This principle applies with particular force in the present case.
The “general words” in section 5058 form the catchall phrase, upon which the majority relies, prohibiting unlicensed persons from using ”any other title or designation likely to be confused with ‘certified public accountant’ or ‘public accountant’ . . . .” (Italics added.) Considered apart from the context of the statute and the overall scheme of which the statute is a part, this phrase could be construed to prohibit unlicensed accountants from using the term “accountant.” But under this construction, which the majority adopts, the enumeration of examples which precede the general words becomes mere surplusage, in violation of the principle of ejusdem generis.
This is so because each of the enumerated examples of titles likely to be confused with the titles C.P.A. and P.A. is comprised of the term “accountant” coupled with a modifier, as are the titles C.P.A. and P.A. themselves. The principle of ejusdem generis leads me to conclude, therefore, that the
The majority states that the doctrine of ejusdem generis is inapplicable because its application “would frustrate the intent underlying the statute.” (Maj. opn., ante, p. 1012.) The majority fails, however, to describe the method it uses to discern the statute‘s underlying intent. Instead, the majority simply states its conclusion without explaining its reasoning. I disagree that the doctrine of ejusdem generis is inapplicable; rather, it is a useful tool for determining the intent of the Legislature based on the language used in drafting the statute.
Had the Legislature meant to prohibit use of the unmodified term “accountant,” it simply would have said so. Just as sections 5055 and 5056 expressly prohibit unlicensed accountants from using the titles “certified public accountant” and “public accountant,” the Legislature could have added a similar provision expressly prohibiting unlicensed accountants from using the term “accountant” as well. Presumably the Legislature would have done so, had it intended to prohibit such accountants from calling themselves “accountants.” “‘Where the [Legislature] has demonstrated the ability to make [its] intent clear, it is not the province of this court to imply an intent left unexpressed.’ [Citation.]” (Peralta Community College Dist. v. Fair Employment & Housing Com. (1990) 52 Cal.3d 40, 50 [276 Cal.Rptr. 114, 801 P.2d 357].)
The majority agrees “that section 5058 does not itself expressly prohibit the use of the unmodified terms ‘accountant’ and ‘accounting‘” (maj. opn., ante, p. 1013) and relies instead on a regulation promulgated by the Board which provides in pertinent part: “The following are titles or designations likely to be confused with the titles Certified Public Accountant and Public Accountant within the meaning of Section 5058 of the Business and Professions Code: [¶] (a) ‘Accountant,’ ‘auditor,’ ‘accounting,’ or ‘auditing,’ when used either singly or collectively or in conjunction with other titles.” (Cal. Code Regs., tit. 16, § 2.)
Such an administrative construction, “although not controlling, is entitled to great weight. [Citations.] . . . The final meaning of a statute, [however], rests with the courts. . . . ‘Administrative regulations that alter or amend the statute or enlarge or impair its scope are void and courts not only may, but it is their obligation to strike down such regulations.’ [Citation.] And this is the rule even when, as here, ‘the statute is subsequently reenacted without change.’ [Citations.] ” (Dyna-Med, Inc. v. Fair Employment & Housing Com., supra, 43 Cal.3d 1379, 1388-1389, italics added.)
The majority concludes that by including the catchall phrase in section 5058, the Legislature vested the Board with discretion to prohibit unlicensed accountants from using the title “accountant” if the Board determined the public otherwise might be misled. I disagree for two reasons.
First, the Legislature would not have prefaced the catchall phrase in section 5058 with a list of examples, all of which consist of the term “accountant” coupled with a modifier, had it intended to prohibit, or to authorize the Board to prohibit, the use of the term “accountant” standing alone. Had the Legislature intended to vest the Board with unfettered discretion to prohibit the use of any title the Board found to be misleading, including the unadorned term “accountant,” it would have used only the catchall phrase employed in section 5058.
By including the examples found in section 5058, the Legislature described the types of titles which might be confused with the titles C.P.A. and P.A. and which the Legislature intended to prohibit unlicensed accountants from using. The title “accountant,” standing alone, does not fit this description. To ignore these examples, as does the majority, violates the doctrine of ejusdem generis, a doctrine which merely reflects our common experience with the manner in which language is used.
Second, the Board‘s decision to prohibit use of the term “accountant,” because it may be confused with the terms C.P.A. and P.A., constitutes a significant alteration of the statutory scheme. The Accountancy Act creates a rather subtle distinction between “public accountancy,” which only C.P.A.‘s and P.A.‘s may perform, and other types of accountancy, which unlicensed
The majority finds persuasive the results of a public opinion poll, commissioned by the state, which posed the following questions: (1) “Do you think that persons who refer to themselves as accountants in advertising to the public are required to be licensed by the State of California,” and (2) “Do you think persons who advertise accounting services to the public are required to be licensed by the State of California to offer such services?” More than half the number of persons queried believed that a license was required in both situations.
The majority concludes that the results of this survey “support the inference that members of the public who believe that licensing is required would assume that a person who uses the title ‘accountant’ and the designation ‘accounting’ to describe the services offered is licensed by the state. [Fn. omitted.]” (Maj. opn., ante, p. 1016.) This information, however, is not helpful in resolving the issue before us. It is not surprising that a person who erroneously believes that all accountants must be licensed would assume that a person using the title “accountant” is licensed. Just as significantly, the survey sheds no light on the relevant issue under section 5058; namely, whether the public is likely to confuse the terms “accountant” and “accounting” with the titles “certified public accountant” and “public accountant.” Instead, the survey reveals only that a majority of the public erroneously believes that all accountants must be licensed.7 It is beyond dispute that no license is required to perform certain types of accounting. The circumstance that a majority of the public believes otherwise is irrelevant.
Section 5058 prohibits unlicensed accountants from using any title that might be confused with the titles C.P.A. and P.A. Contrary to the conclusion reached by the majority, the statute was not intended to prohibit, or to authorize the Board to prohibit, an accountant‘s use of any term that the public might construe as implying licensure by the state. (Maj. opn., ante, p. 1004.)
The importance of this distinction is demonstrated by the following example. The majority concedes that unlicensed accountants may use the
Neither the Accountancy Act in general, nor section 5058 in particular, prohibits an unlicensed accountant from using the title “accountant.” As the majority recognizes, it is lawful for unlicensed accountants to perform certain types of accounting services. Nothing in the statutory scheme prohibits unlicensed accountants who lawfully provide accounting services from referring to themselves as accountants, nor does anything in the act authorize the Board to prohibit by regulation what the Legislature has permitted by statute.
Accordingly, I would reverse the judgment of the Court of Appeal. I reach this conclusion on the basis of the plain meaning of the words of the statute as interpreted with the aid of settled principles of statutory construction, and in the absence of any clear expression of legislative intent to the contrary, without regard, of course, to whether it would be good public policy for the Legislature to prohibit unlicensed accountants, whatever their level of education and experience, from calling themselves “accountants.”
Mosk, J., and Kennard, J., concurred.
Appellants’ petition for a rehearing was denied August 27, 1992. Mosk, J., Kennard, J., and George, J., were of the opinion that the petition should be granted.
Notes
This portion of