The Board of Public Accountancy has issued a rule change that the U.S. Uniform Commercial Code (UCC) must be covered in the business law course that is required for the CPA Exam. The National Association of State Boards of Accountancy (NASBA) is currently in the process of researching courses that meet this requirement. However, as of now, if your business law course does not specify UCC coverage in the course description, students are being asked to supply additional information (i.e., course syllabus) for their business law class to count towards the CPA requirement.
If your business law course currently covers the UCC, we recommend including this in the course description as soon as possible. If it does not cover UCC, please plan to include this topic in the course at your earliest convenience to avoid your students needing to submit additional information regarding the course to NASBA. View exhibit 1 below for examples of UCC coverage. If your business law course does not cover UCC, students will be required to take a business law course that will satisfy the coverage requirement.
We understand that this is causing issues for students, and we are in discussions with the Board of Public Accountancy and staff on solutions that will either provide for a grace period for the affected students and/or a policy change/reversal.
Below are the details provided by NASBA:
- The business law course must include coverage of some of the UCC,
- There is no minimum requirement for the UCC coverage provided it is covered,
- This also applies to international courses,
- For licensure applications: Business law courses previously accepted for a candidate's examination application prior to March 2021 can be grandfathered in for the candidate's licensure application provided that examination evaluation was completed for Massachusetts, and
- For examination applications and licensure applications for candidates that did not sit for the examination as a candidate of Massachusetts: There is no grace period – all applications received after March 9, 2021 need to include a business law course that includes coverage of the UCC.
Exhibit 1: Examples of Busness Law Topics
Commercial Paper A type of negotiable instrument where the legal rights and obligations of involved parties are governed by articles three and four of the UCC. Commercial paper is an unsecured form of a promissory note that pays a fixed-rate interest. It is typically issued by large banks or corporations to cover short-term receivables and meet short-term financial obligations, such as funding for a new project.
The UCC identifies four basic kinds of commercial paper:
- Promissory notes,
- Drafts,
- Checks, and
- Certificates of deposit.
Contracts The UCC contains rules applying to many types of commercial contracts, including contracts related to the sale of goods, leasing of goods, use of negotiable instruments, banking transactions, letters of credit, documents of title for goods, investment securities and secured transactions. The UCC applies to:
- Goods: Contracts that involve the sale and purchase of goods in the amount of $500 or more; and
- Merchants: Agreements in which at least one of the parties is a “merchant.” Merchants are those who, as part of their occupation deal with goods of the kind covered by the agreement, and who have knowledge or skill specific to the goods or practices.
There are also many business-related contracts that the UCC does not cover. Key among these are real estate contracts, service contracts and employment contracts are:
- The course must be focused on business law,
- Social responsibility is not the same thing as business law, and
- Business law from a law school is acceptable – provided it includes UCC coverage.
Click here to view information for the current CPA Exam requirements for Massachusetts. The regulations and requirements from each board are subject to change without notice. Therefore, candidates are suggested to check this link for the most current requirements.