8Ed.sol7.3 - CASE 7.3 SCOTT FANE, CPA Synopsis In 1985,...

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CASE 7.3 SCOTT FANE, CPA Synopsis In 1985, Scott Fane shut down his New Jersey accounting practice and moved south to sunny Florida. Scott hoped that Florida’s booming economy would allow him to quickly establish a prosperous accounting practice. After arriving in Florida, Scott, a CPA, filed for a license to practice in Florida with the State Board of Accountancy. After obtaining that license, Scott intended to recruit clients for his new practice using methods that had worked well for him in New Jersey. He planned to use direct solicitation measures, such as, direct mail, telephone calls, and in-person visitations to obtain clients. Scott soon learned that the Florida State Board of Accountancy prohibited CPAs from directly soliciting clients. After several years of frustration, Scott sued the state board in 1990. In his lawsuit, he maintained that the board’s ban on direct solicitation was unconstitutional. Scott charged that the ban violated his First Amendment rights to freedom of speech, more specifically, his right to commercial speech. After several rounds of legal battles, Scott and the Florida State Board of Accountancy squared off in front of the U.S. Supreme Court. In 1993, the Supreme Court ruled in Scott’s favor, effectively squelching Florida’s ban on direct solicitation by CPAs. Within months after the Supreme Court ruling in Scott’s case, the Florida Supreme Court struck down the Florida Board of Accountancy’s ban on competitive bidding by CPAs. Similar to the Fane case, the Florida Supreme Court ruled that the ban on competitive bidding improperly restricted CPAs’ right to commercial speech. In 1994, the Florida state board saw its record fall to 0 and 3 in commercial speech cases. Silvia Ibanez, a practicing attorney who was also a CPA and a CFP, sued the Florida state board for reprimanding her. The reprimand stemmed from Ibanez publicizing her CPA and CFP designations in the yellow pages and on her business cards. The state board ruled that Ibanez’s use of her CPA designation misled third parties who might conclude that she was a practicing CPA. Additionally, the state board charged that her use of the CFP designation violated its rule that Florida CPAs could publicly display only specifically approved specialty designations. (The CFP designation had not been approved as a specialty designation by the state board.) The U.S. Supreme Court ruled that the state board had improperly infringed on Ms. Ibanez’s freedom of (commercial) speech and overturned the reprimand imposed on her.
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Case 7.3 Scott Fane, CPA Scott Fane, CPA—Key Facts 1. Scott Fane, CPA, moved to Florida from New Jersey in 1985 because he hoped that Florida’s healthy economy would allow him to develop a successful accounting practice.
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This note was uploaded on 12/12/2010 for the course MGMT 365 taught by Professor G during the Spring '10 term at Bucknell.

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8Ed.sol7.3 - CASE 7.3 SCOTT FANE, CPA Synopsis In 1985,...

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