Opinion
Defendant and appellant Jack M. Hill, doing business under the firm name of A-Accounting — Jack M. Hill & Co., appeals from an order of the Santa Clara County Superior Court granting a preliminary injunction. An amicus curiae brief has been filed in support of the order granting the preliminary injunction of the State Board of Accountancy.
Issues
1) An uncertified person may not use the term “accountant” or “accounting” in the name of his business.
2) The trial court properly granted the preliminary injunction.
Facts
The People of the State of California through the District Attorney of Santa Clara County filed a complaint for injunction, civil penalties, exemplary damages and other relief in the Superior Court of Santa Clara County naming Jack M. Hill and A-Accounting — Jack M. Hill & Co., as defendants. The complaint contains the following allegations: Jack M. Hill is the proprietor, owner, manager, agent, employee and representative of A-Accounting — Jack M. Hill & Co. Appellant is not licensed as a public accountant or as a certified public accountant. Appellant has engaged in false and misleading advertising by using the term “ ‘Accounting’ ” in his business name (“ ‘A-Accounting — Jack M. Hell & Co.’ ”) which appears at his place of business, in the telephone directory and on business correspondence. The use of the term “ ‘accounting’ ” is
On the same date that the complaint was filed an order to show causé why the preliminary injunction should not be granted was signed by the lower court. On November 18, 1975, appellant filed a declaration and points and authorities in opposition to the motion for a preliminary injunction. The matter was heard before the Honorable John R. Kennedy. A full hearing was held on notice. On November 25, 1975, the lower court granted a preliminary injunction enjoining appellant from using the words “ ‘accounting’ ” or “ ‘accountant’ ” in conjunction with or reference to his business and from “[Representing [himself] as [an accountant] in any manner that would tend to confuse or mislead the public....” Thereafter, appellant answered the complaint.
1) An uncertified person may not lawfully use the term “accountant” in the name of his business.
The statutes pertaining to accountants in California are found in the Business and Professions Code sections 5000 through 5157 and is commonly known as and hereinafter referred to as the “Accountancy Act.”
Section 5033
1
defines a “ ‘[certified public accountant’ ” as “any person who has received from the board a certificate of certified public accountant and who holds a valid permit to practice under the provisions of this chapter.”
2
Section 5034 defines a “ ‘[p]ublic accountant’ ” as a “person who has registered with the board as a public accountant and who holds a valid permit for the practice of public accountancy.”
3
Section 5050 provides in pertinent part: “No person shall engage in the practice of public accountancy in this State unless such person is the
“(a) Who holds himself or herself out to the public in any manner as one skilled in the knowledge, science and practice of accounting, and as qualified and ready to render professional service therein as a public accountant for compensation; or
“(b) Who maintains an office for the transaction of business as a public accountant; or
“(c) Who offers to prospective clients to perform for compensation, or who does perform on behalf of clients for compensation, professional services that involve or require an audit, examination, verification, investigation, certification, presentation, or review, of financial transactions and accounting records; or
“(d) Who prepares or certifies for clients reports on audits or examinations of books or records of account, balance sheets, and other financial, accounting and related schedules, exhibits, statements, or reports which are to be used for publication or for the purpose of obtaining credit or for filing with a court of law or with any governmental agency, or for any other purpose; or
“(e) Who, in general or as an incident to such work, renders professional services to clients for compensation in any or all matters relating to accounting procedure and to the recording, presentation, or certification of financial information or data.”
Under section 5052 the following persons are excepted from the Accountancy Act: “any person who as an employee, independent contractor, or otherwise, contracts 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.”
Under section 5054 any corporation engaged in the practice of public accountancy at the effective date of section 5054 may continue to engage in public accountancy.
Section 5055 prohibits the use of the title “ ‘certified public accountant’ ” and the abbreviation “ ‘C.P.A.’ ” except by those holding a certificate. Similarly, section 5056 prohibits the use of the title “ ‘public accountant’ ” and the abbreviation “ ‘P.A.’ ” except by those holding a certificate of public accountancy. Section 5058 prohibits the use of other titles likely to be confused with the terms “ ‘certified public accountant’ ” and “ ‘public accountant,’ ” and abbreviations likely to be confused with “ ‘C.P.A.’ ” and “ ‘P.A.’ ” Section 5058 enumerates such titles as “ ‘chartered accountant,’ ” “ ‘certified accountant,’ ” “ ‘enrolled accountant,’ ” “ ‘registered’ ” or “ ‘licensed accountant’ ” and similar abbreviations as “ ‘C.A.,’ ” “ ‘E.A.,’ ” “ ‘R.A.,’ ” or “ ‘L.A.’ ”
Appellant argues that the Legislature has not prohibited the practice of unlicensed accountancy. (Bus. & Prof. Code, § 5052.) Nor has the Legislature expressly prohibited the use of the word “ ‘accountant’ ” by an unlicensed person as long as the word is not used in conjunction with another word that connotes official licensing or sanction. Appellant states: “the recital of modifiers to the word ‘accountant’ [found in section 5058] and to the abbreviation ‘A’ is sufficiently repeated in the statutory language as to lead one to believe” that “accountant” was omitted deliberately.
Respondent and the State Board of Accountancy contend: “when an unlicensed person represents that he has the requisite skills and qualifications of a public accountant by holding himself out as an ‘accountant’ or as one versed in ‘accounting,’ there is a substantial risk that the public may be confused into thinking that he is an actual licensee of the state.” The State Board of Accountancy concedes that the California statutory scheme to regulate the practice, does not prohibit an unlicensed person from practicing accounting or doing accounting, provided that such practice or work does not come under the classification of “public accounting,” but argues that the statutory scheme does prohibit such a person from calling himself an accountant.
All parties to this action agree that no California case has considered the issue whether an uncertified or unregistered person may use the term
It is well established in other jurisdictions that the Legislature has, in the public interest and for the general welfare, the power to regulate the profession of public accounting by prohibiting a person from representing himself as a “certified public accountant” or using the initials “C.P.A.” or otherwise holding himself out as qualified under such or similar statutes without actually having received such certificate.
(Heller
v.
Abess
(1938)
In
State
ex rel.
Short
v.
Riedell
(1924)
In
Campbell
v.
McIntyre
(1932)
In
Florida Accountants Association
v.
Dandelake
(Fla. 1957)
In
Burton
v.
Accountant’s Society of Virginia, Inc.
(1973)
In
Texas State Board of Public Accountancy
v.
Fulcher
(Tex.Civ.App. 1974)
It should be noted that in California there is no express prohibition, as there is in Texas, against using the term “accountant” or “accounting,” if it is not used in conjunction with a term which connotes official endorsement.
However, Texas State Board of Accountancy v. Fulcher is important as it shows that the trend of courts is to view the profession of accountancy as changed since Short, supra, was decided and that accountancy is no longer a profession in which only its members are interested, but that it is a profession in which the public has an interest.
In
Davis
v.
Allen
(1957)
Section 5051, subdivision (a), states that a person shall be deemed to engage in the practice of public accountancy “Who holds himself or herself out to the public in any manner as one skilled in the knowledge, science and practice of accounting, and as qualified and ready to render professional service therein as a public accountant for compensation;...” What does the public think when they see a company with the title
“A-Accounting”
advertising that
name?
Does not the very
name
connote that they are accountants ready and prepared to do accounting for the general public? The very name itself is a holding out to the public generally that the company is comprised of accountants who offer for compensation, “professional services that involve or require an audit, examination, verification, investigation, certification, presentation, or review, of financial transactions and accounting records; or . . . [¶] . . .
The Attorney General on November 16, 1965 (
As the Attorney General further states: “While this section has not been judicially interpreted, in
Board of Dental Examiners
v.
Jameson,
Thus, the use of the title “A-Accounting” like the use of the word “accounting” on the building directory and office door can only be interpreted to mean that he is representing to the public that he is skilled in the practice of accounting and is qualified and ready to provide accounting services to the public, a representation that an unlicensed person is prohibited from doing. The fact that the telephone company in its directory lists the “A-Accounting” firm under “public accountants” is itself some evidence of how the public is misled by this title.
By arguing that his conduct falls within the bookkeeping exemption contained in section 5052, appellant seeks to escape the provisions of the Accountancy Act. There is a great difference between bookkeeping and accounting. Had appellant advertised himself as “bookkeeper” or
2) The trial court properly granted the preliminary injunction.
Appellant states that the granting of a preliminary injunction in the instant proceeding did not preserve the status quo of the parties as respondent sought to prevent appellant from using the word “accounting” in the business title of the company and on the stationery for the business and on any sign advertising the business. The granting of the preliminary injunction in a case such as the instant one will require appellant to take affirmative action to delete the word “accounting” from all places where the business title appears. Appellant relies upon the following statement found in
State Bd. of Barber Examiners
v.
Star
(1970)
It is alleged in the complaint that appellant did engage in false and misleading advertising in violation of section 17500 in that the use of the term “ ‘accounting’ ” in the business title is deceptive and misleading in that it implies that appellant is licensed to practice public accounting. Section 17535 provides that false or misleading advertising “may be enjoined” in actions prosecuted by the Attorney General or any district attorney. Section 17535 and section 3369 of the Civil Code are both designed to restrain “future conduct” that is likely to deceive or mislead the public.
(Payne
v.
United California Bank
(1972)
However, as shown, appellant is carrying on practices which are deceptive and unfair on their face. The “status quo” referred to in
Star, supra,
is defined as “ ‘the last actual peaceable, uncontested status which preceded the pending controversy.’ ”
(United Railroads
v.
Superior Court
(1916)
In
Jaynes
v.
Weickman
(1921)
The pleadings indicate that great or irreparable harm to the public would result if the injunction were not granted as the public would continue to be misled into thinking that appellant is qualified to do public accounting. This would result in a great possibility of detrimental reliance on the part of the public and at the same time constitutes unfair competition and consequent harm to those who are licensed and entitled to practice certified public accountancy and public accountancy. Although appellant, under the injunction, is required to take affirmative action to remove words from his advertising, it like the injunction in Jaynes, supra, does not change the injunction from prohibitory to mandatory.
The preliminary injunction was proper.
Order affirmed.
On February 22, 1977, the opinion was-modified to read as printed aboye.
Notes
Retired Presiding Justice of the Court of Appeal sitting under assignment by the Chairman of the Judicial Council.
A11 references are to the Business and Professions Code unless otherwise indicated.
Section 5055 states that a certified public accountant may use the abbreviation “ ‘C.P.A.’ ”
Section 5056 states that a public accountant may use the abbreviation “ ‘P.A.’ ”