PUBLIC ACCOUNTANCY ‑- USE OF WORD 'AUDIT' IN TITLE OF COMPANY NOT REGISTERED UNDER CHAPTER 226, LAWS OF 1949

PUBLIC ACCOUNTANCY ‑- USE OF WORD "AUDIT" IN TITLE OF COMPANY NOT REGISTERED UNDER CHAPTER 226, LAWS OF 1949

The use of the word "audit" in the name of the company not registered under chapter 226, Laws of 1949, is not a violation of that act; however, the use to which such company name is employed may constitute a violation.

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                                                                    July 29, 1953

Mr. Roy C. Comer
Chairman
State Board of Accountancy
2012 Smith Tower
Seattle 4, Washington                                                                                                              Cite as:  AGO 53-55 No. 106

Dear Sir:

            This will acknowledge your letter of July 8, 1953, requesting our opinion on whether or not the use of the word "audit" in the name of a company which is not engaged in the practice of public accounting is a violation of the provisions of section 33, or any similar section of chapter 226, Laws of 1949.

            Our conclusions may be summarized as follows:

            The use of the word "audit" in the name of a company not registered under chapter 226, Laws of 1949, is not a violation of that act; however, the use to which such company name is employed may constitute a violation.

                                                                     ANALYSIS

            You state that the company using the title in question is not employed in the practice of public accounting, but is employed by department stores and others to check on the honesty of clerks and cashiers.

             [[Orig. Op. Page 2]]

            Section 33, chapter 226, Laws of 1949, deals with the use of designations and titles of certain classes of accountants.  Subsection (h) of that section provides, in part:

            "No person shall sign or affix his name with any wording indicating that he is an accountant or auditor, or with any wording indicating that he has expert knowledge in accounting or auditing, to any accounting or financial statement, or to any opinion on, report on or certificate to any accounting or financial statement, unless he holds a valid permit issued under section 28 of this act:  * * *"

            Subsection (j) provides:

            "No person shall sign or affix a corporate name, with any wording indicating that it is a corporation performing services as accountants or auditors or composed of accountants or auditors or persons having expert knowledge in accounting or auditing to any accounting or financial statement, or to any report on or certificate to any accounting or financial statement."

            The purpose of the above quoted subsections, and the others in section 33, is to prevent the use of certain titles and designations of persons not holding permits that would tend to deceive or confuse the general public.

            The statute is specific that the use of the word "audit" or any word indicating expert knowledge in accounting or auditing shall not be attached to any accounting or financial statement, or to any opinion on, report on or certificate to any accounting or financial statement.  Furthermore, the statute prohibits the use of a corporate name which contains words indicating that it is a corporation performing services as an accountant or auditor to be affixed to any accounting or financial statement, or to any report on or certificate to any accounting or financial statement.

            It is our opinion that the provisions of these sections do not extend to the mereuse of the word in the name of the company not registered under the provisions of the public accounting act.  However, the use of the name on a financial statement or report on or certificate to an auditing or financial statement indicating that the corporation is performing services as an accountant or auditor, would constitute a violation of that section.

             [[Orig. Op. Page 3]]

            We advise, therefore, that the inclusion of the word "audit" in the name of the company, not registered under the provisions of the act, is not, in and of itself, a violation of that act.

Very truly yours,

DON EASTVOLD
Attorney General

PHYLLIS DOLVIN
Assistant Attorney General