Dealing with individuals’ and businesses’ finances necessitates a high degree of public trust. That is why, for Certified Public Accountants (CPAs), their professional license could be at risk with just a single complaint against them. If you practice as a CPA and are on the verge of losing your license, we at Santa Cruz License Attorney can help minimize the damage and save your career. We know the intricacies of defending an accountant’s license and strive to ensure our clients receive the most favorable outcome. Call us today for a free, confidential consultation.
The California Board of Accountancy (CBA) Role
The California Board of Accountancy is the state agency that regulates CPAs in California. It has several functions that ensure all CPAs provide high-quality service when attending to consumers. Some of the functions of the CBA are the following:
- Issuing CPA licenses to new qualified applicants and handling continuing education and license renewal matters
- Setting the standards that CPAs in California must abide by
- Monitoring CPA services for professional or ethical violations
- Probing allegations of unprofessional conduct and imposing discipline when warranted
The mission of the CBA is to protect all consumers by guaranteeing that only validly licensed professionals practice certified public accounting in accordance with the professional standards in effect.
What Do CPAs Do?
CPAs spend several years acquiring education, qualifications, and a license to practice. For example, a CPA must pass the Uniform CPA Exam and satisfy specific experience and education requirements before they are allowed to practice. The American Institute of Certified Public Accountants (AICPA) sets and grades the exam.
Accounting itself mandates that the professionals pay attention to details and understand the rules governing the profession. Once licensed, a CPA is mandated to perform several roles. Some of their key responsibilities include the following:
- Doing tax planning and preparation. CPAs prepare intricate tax returns for businesses and individuals, advise parties on strategies that are tax efficient, and represent individuals and businesses in IRS audits.
- Providing assurance and audit services. Licensed CPAs can perform independent audits to verify whether financial records are accurate and comply with the Generally Accepted Accounting Principles (GAAP)
- Conducting forensic accounting. CPAs investigate financial discrepancies, prevent fraud, and conduct forensic audits.
- Prepare financial reports. They review, analyze, and compile financial statements to help companies make better decisions.
- Consulting and advisory. Another role of CPAs is to offer management, financial, consulting, and corporate governance counsel.
CPAs can work in various places, including in corporate settings, public accounting firms, government agencies, and private practice. In performing your services as a CPA, you must comply with continuing education requirements and ethical standards as the CBA requires. Failure to do so could place your license at risk of suspension and revocation.
Note that a certified public accountant is different from an accountant. Anybody who does any kind of accounting job can call themselves an accountant. That is true even when the person does not hold a degree in accounting. However, a certified public accountant is an individual who has acquired the professional title via education and training. They also possess the required experience and license.
To qualify as a certified public accountant, you must complete an accounting exam and program. You must also garner the required experience in public accounting. Only after you are licensed can you use the designation of Certified Public Accountant.
Despite all of these requirements for eligibility as a certified public accountant, it is easy to lose your license. CPAs are subject to various accusations due to their roles in managing funds. An unintentional mistake may also place an accountant’s professional license in jeopardy.
That said, you want to seek legal advice immediately if a party has filed a complaint against you with the board. A license defense lawyer understands how crucial certified public accountants are. In addition, they understand how risky the accounting job can be and how easily the licenses can be at risk. Attorneys also know that these professionals face false or exaggerated accusations. Thus, they are on your side. They will help defend your license and increase the chances of saving your career.
Violations that CPAs Can Be Disciplined For
Certified public accountants are held to a higher standard of honesty, accuracy, and professionalism. Consequently, most allegations that may lead to you losing your practice license will revolve around violations of those standards. Per the California Code of Regulations and California Accountancy Act, a CPA may be subject to disciplinary action for:
- Incompetence, negligence, or gross negligence
- Failure to provide services per professional standards
- Deceit or misrepresentation in the accounting practice
- Use of a name not registered with the California Board of Accountancy on social media
- Administrative sanctions by other government bodies, for example, IRS, SEC (Securities and Exchange Commission), California Franchise Tax Board, and Public Company Accounting Oversight Board
- A Criminal conviction of a crime substantially related to an accountant’s duties, for example, embezzlement, fraud, and money laundering
- Failing to fulfill the requirements of the license renewal
- Practicing public accounting without a legitimate license
- Using the CPA designation without a legitimate license
- Any other ethical or professional violation suggests you are unable to fulfill your CPA duties.
The board usually receives complaints about the above violations from different parties, including the public, professional societies, police agencies, employers, other license holders, and other state or federal government agencies. The CBA can also obtain information about misconduct through regular licensee audits and compulsory self-reporting.
What Happens After the CBA Receives a Complaint?
Once the CBA receives any form of official complaint that you have committed a wrongdoing, it will first verify if the complaint falls under its jurisdiction. If so, the board will prioritize the complaint based on the potential for ongoing harm to consumers and investigate it. If the case is highly harmful to consumers, the board might issue an ISO (interim suspension order). This temporary, immediate action halts a licensee under investigation from practicing while the case is being investigated. The board issues an ISO to safeguard consumers during serious, unresolved investigations.
The board assigns the complaints it receives to its Enforcement Division. When the complaint is here, non-technical and technical analysts determine whether a violation occurred. The analysts consult experts on intricate matters. If the analysts establish that a violation occurred, the Enforcement Division initiates an investigation. It will inform you of the formal complaint and require you to provide information connected to it. The Enforcement Division may also obtain witness testimony and issue subpoenas for documents.
When you receive notice that there is a complaint against you, contact a lawyer who defends accounting licenses as quickly as possible. The CBA may use whatever you mention to the board investigator, including during your investigative interview, against you. If your statements carry a lot of weight, they may subject you to administrative discipline and possible criminal charges.
The investigation by the Enforcement Division may lead to one of these three outcomes: closure of the case, citation and fine for minor violations, or referral of the case to the Office of the Attorney General. Having an attorney involved in your case as soon as possible may lead to a more lenient outcome, including the investigation being closed or a citation and fine, which does not qualify as formal disciplinary action.
Importantly, a formal complaint is not considered public record. Therefore, if the board closes the investigation without informal or formal disciplinary action, you can avoid negative effects and publicity that could hurt your career.
If the CAB refers your matter to the Office of the Attorney General, it means there is sufficient evidence to support the complaint against you. In this case, a Deputy Attorney General will file an Accusation (for licensees) or a Statement of Issues (for new applicants) seeking to discipline your license. Once that happens, a notice will be sent to you.
If the board sends you notice of a Statement of Issues or an Accusation being filed against you, you have fifteen days to file a Notice of Defense in response. If you do not do so, the board will issue a default order at the end of fifteen days. The issuance of this order will automatically revoke your license.
However, if you file your response on time, the Deputy Attorney General will set the hearing date. Before the hearing happens, the board may attempt to resolve the case by reaching an agreement with you through a stipulated settlement. This is where you admit the allegations against you and accept the punishment the board is proposing.
If a stipulated agreement fails, the case proceeds with a proceeding at the OAH (Office of Administrative Hearings). An ALJ (administrative law judge) presides over the hearing. The purpose of this hearing is for you to show why the CBA should not discipline your license. Conversely, the board, represented by the Deputy Attorney General, will aim to demonstrate that your license warrants punishment.
At the end of the hearing, the ALJ suggests a decision, which the CBA may or may not adopt. The CBA may impose disciplinary actions against you for violating applicable regulations or statutes. The disciplinary actions imposed depend on the severity and nature of the misconduct, your prior history of wrongdoing, and the mitigating factors present. They may include the following:
- Probation with professional license restrictions
- License revocation
- Restitution
- License suspension
- CPA license denial
- Public reproval
Apart from disciplinary action, the board might seek to recover all of the costs related to the enforcement of its laws and the investigation. Also, it may impose administrative penalties. Even if the CBA allows you to retain your practice license and imposes lesser discipline, such as probation or fines, any penalty against your professional license might still hurt your reputation, as it will be a public record.
After some time, you may pursue the removal of the restrictions placed on your license. You may also request the board to reinstate your license with the help of a CPA license defense counsel.
Why You Need a Lawyer to Defend Your License
Right after someone files a complaint against you, the CBA will actively start to seek evidence that supports the complaint. The evidence includes anything you do or say in response to the complaint. The board does not have any obligation to give you the benefit of the doubt as its mandate is to safeguard consumers, not license holders.
Also, like other licensing boards, the CBA had discretion to impose disciplinary action and a lower burden of proof to determine whether disciplinary action is warranted. That means you are on the defensive and possibly vulnerable from the start. An experienced attorney can assist you in leveling the playing field and navigating this intricate situation while defending your rights. Your legal counsel can:
- Become your legal representative and advisor when meeting with the board investigator.
- Prepare a convincing written response to your formal complaint, which may lead to the complaint being dismissed.
- Review the facts of the case and develop a compelling defense
- Collect witnesses and evidence to corroborate your case
- Negotiate with the board at various stages to have the complaint against you dropped, or enable you to face lenient penalties
- Defend you rigorously at an official hearing, if need be
Contact a CPA Professional License Defense Lawyer Near Me
As a CPA, you have invested much time, money, and effort in practice. Accusations of wrongdoing and questioning your license can be highly traumatic. And yet, since you are entrusted with confidential information, the CBA must hold you to higher standards of professional and ethical excellence. Therefore, even a simple, unaddressed complaint can transform into a crisis that may lead to disciplinary action and the potential end to your career.
Luckily, having an experienced CPA professional license defense lawyer can safeguard you from detrimental actions and protect your career. At Santa Cruz License Attorney, we have assisted many licensed CPAs and other professionals whose licenses are under investigation, and we can help you, too. Whether the allegations against you stem from a criminal issue, an unprofessional conduct allegation, or an ethics complaint, we can help you achieve the best possible outcome. Call us at 831-770-6474 to learn about your legal options and for expert counsel.
