As a certified public accountant, you are subject to comprehensive guidelines and standards that address ethical considerations in your professional and personal life. A professional license is paramount to your livelihood; losing it could jeopardize your practice, future, and reputation. At San Diego License Attorney, we understand the intricacies of defending it. Whether your licensing issue is due to an allegation of malpractice, a complaint, or a conviction, we can help you protect your future, career, livelihood, professional reputation, and rights. We can guide you through the relevant steps to prevent your professional license from being revoked or suspended. We can also help you answer difficult questions, respond to the complaint, and create a defense designed for your case.

What Does a Certified Public Accountant Do?

Certified public accountants are preferred providers, valued employees, and trusted advisers of different advisory and financial services to individuals, government agencies, businesses, and non-profit organizations of every size. They are the backbone of enhancing economic development and growth and maintaining trust in financial systems. 

The professional must have passed the Uniform Certified Public Accountant Examination and satisfied California’s state law experience and education requirements. They should also hold a license issued by the California Board of Accountancy.

To maintain your ability to practice as a CPA, you should complete continuing education tailored to enhance or maintain your competence and knowledge.

Here are some of the services a CPA provides:

  • Audit and assurance — You help a business to ensure the reliability and accuracy of its financial statements. That way, the company can build trust with its stakeholders and maintain transparency.
  • Help businesses with tax preparation and planning, maximizing tax savings and minimizing tax liabilities.
  • Financial consulting — You create budgets, review financial data, and advise business owners to make wise financial decisions and realize their business goals.
  • Forensic accounting —  It entails investigating fraud and financial discrepancies. The expertise offers expert testimonies in legal cases and uncovers financial fraud.
  • Personal financial planning — You assist clients in planning for retirement, managing their finances, and realizing long-term financial goals.
  • Business valuation — It involves helping businesses determine the value of their liabilities and assets. The service is fundamental to a business deciding about sales, acquisitions, and mergers.

The California Board of Accountancy Mission

The CBA issues licenses to CPAs, accounting corporations, accounting partnerships, and accounting firms. The first license is issued to individuals, while the board gives the remaining three to businesses.

The board regulates the accounting profession for the public interest by maintaining and establishing entry standards of qualification and behavior within the profession. The California Accountancy Act tasks the board with the following:

  • Qualifying candidates for the Uniform CPA exam
  • Certifying, licensing, and renewing licenses for CPAs
  • Registering public accountant (PA) partnerships, corporations, and CPA partnerships
  • Receiving and investigating complaints
  • Taking enforcement action against license holders who violate CBA laws
  • Ensuring compliance with continuing education requirements
  • Monitoring CPAs’ work product to ensure compliance with professional standards

The board’s proactive approach to addressing complaints, conducting investigations, and imposing disciplinary action underscores its unwavering commitment to consumer protection. Consequently, the board recognizes you for the skills, standards, and ethics you maintain.

The list below highlights violations that can lead to disciplinary proceedings by the CBA against you as an accountant:

  • Breach of fiduciary duty
  • Accepting employment with an audit client
  • Discrimination
  • Breaching regulations of client confidentiality
  • Dishonesty, fraud, deceit, or misappropriation of funds or property
  • Deficiencies in peer review
  • False advertising
  • Incompetence
  • Criminal convictions
  • Failure to adhere to Generally Accepted Accounting Procedures (GAAP)
  • Failure to preserve and safeguard client records
  • Paying or accepting referral payments
  • Fraud when seeking an occupational license
  • Deliberate accounting breaches
  • Unlawfully receiving commissions
  • Signing attest reports without authorization
  • Failure to cooperate with CBA investigations
  • Professional misconduct
  • Failure to file personal income tax returns
  • Practicing while battling addictions to alcohol or drugs
  • Undertaking audit work without using an engagement letter
  • Practicing accounting under an unlicensed company or unapproved name
  • Deliberately preparing false or misleading financial reports, statements, or information.
  • Civil judgment for misrepresentation, fraud, theft, or dishonest acts
  • Failure to complete mandated continuing education, falsifying continuing education records.
  • Violations involving conflict-of-interest regulations
  • Publicly displaying an expired, suspended, or revoked license
  • Conducting professional activities that you are unqualified to do

The California Board of Accountancy receives complaints from the general public, other licensees, police agencies, or employers. Once the board receives an allegation, it will prioritize the complaint based on its potential harm to clients and start its investigations. In cases with extreme potential risk of damage, the board could issue an ISO (interim suspension order).

An ISO is an emergency order that orders you to stop practicing while the board conducts its investigation. The board can issue the ISO quickly with no hearing or notice or with very little notice or hearing. The ISO could lead to the closure of your business, loss of the privilege to practice, suspension of other licenses and credentials, and damage to your professional reputation. Therefore, gathering all relevant resources and hiring an experienced lawyer to fight this disciplinary action is essential.

The licensing agency designates allegations to the enforcement division, where technical and non-technical analysts work to establish if an alleged violation happened. The enforcement division can also consult professional experts in highly complicated cases.

If the investigations are initiated, the division will inform you of the accusations you face and request details relating to the matter. If you are notified of an allegation against you by the board, you should consult your license defense lawyer immediately. Note that whatever you disclose to a CBA investigator, including during investigative proceedings, could be used against you, resulting in disciplinary measures or even criminal proceedings.

The board’s investigation can result in any of the following outcomes: citation, closure, or filing of a formal accusation (which could result in a formal disciplinary action). Enlisting an attorney once you receive the board’s notification can help you achieve a favorable case outcome. The board does not disclose complaints to the general public, so getting the investigation against you closed without citation or any disciplinary action will help you avoid bad publicity that could hurt your career.

If the California Board of Accountancy decides to initiate formal proceedings against you, the disciplinary process entails the following:

  • First, the AG will prepare a formal written accusation. The board will serve you the accusation at your residence or workplace. You will also receive a notice of defense. If you seek to challenge the allegations against you, you must file the Notice of Defense with the CBA within 15 days.
  • In formal disciplinary cases, you have a right to legal representation, though the board does not offer you a lawyer.
  • The board issues a default verdict if you choose not to file a Notice of Defense. However, you still have the chance to work out a negotiated settlement. The resolution renders a reduced disciplinary measure that is agreeable to all parties. You could also request formal proceedings.
  • The CBA proceedings are conducted through California’s Office of Administrative Hearings (OAH). Typically, these hearings are similar to civil trials performed by an Administrative Law Judge (ALJ). You are entitled to opening and closing statements, present evidence, subpoena, and cross-examine witnesses.
  • The ALJ tasks include rendering a resolution and assigning applicable penalties based on case facts. The CBA will adopt this decision or lower the proposed penalties.
  • Finally, you can file a Petition for Reconsideration, which is an appeal of the ALJ’s decision, if the decision is not agreeable to you. The CBA could reconsider your case or assign a new ALJ.

Citations

What to Expect with Citation

There is much risk if someone files a complaint against you with the CBA. The potential penalties can be very harsh if the matter makes it to a formal hearing.

First violations attract a maximum fine of $5,000, while a subsequent offense attracts penalties not exceeding $10,000. Furthermore, if you are found guilty of violating specific provisions of the California Accountancy Act, you could be penalized $50,000 for a first violation. Companies may be penalized up to $1,000,000.

The CBA also maintains many disciplinary guidelines to determine corrective penalties for violations. These penalties may consist of a cease and desist probation letter, undergoing education courses, and a full license suspension.

Common Penalties and Disciplinary Action

Here are some of the disciplinary measures the board can take after you have committed a violation:

  • Reprimands
  • Continuing education
  • Serving probation
  • Revoking your professional license — You can no longer practice accounting once the CBA revokes your license.
  • License suspension
  • Limiting your practice

Before imposing any disciplinary measure, the board considers the following factors:

  • The severity of your violation and the circumstances surrounding it — You might face a severe sanction if your violation harmed other people or posed a threat to the public.
  • History of disciplinary proceedings — You are more likely to receive lesser sanctions than a repeat offender.
  • Your remediation efforts could be a mitigating factor.
  • Degree of sanction necessary to prevent future violations. 

Potential Effects of a Criminal Charge on Your CPA License

Like most professionals, CPAs face criminal accusations at specific career points. It is common for police officers working with the Attorney General and the CBA to conduct undercover operations to collect evidence.

Licensed accountants, in addition to a criminal trial, face criminal proceedings that can potentially attract additional disciplinary action by the CBA.

The legal threshold states that your felony or misdemeanor must be substantially connected to your accounting license. However, the board can broadly define what is considered substantially related. Some of the offenses the licensing board substantially finds related to your practice include the following:

  • All fraud offenses
  • Driving under the influence of alcohol or drugs (DUI)
  • Sexual assault or domestic violence
  • Tax evasion
  • Possession of drugs with the motive to sell
  • Not making appropriate disclosures
  • Simple possession of a controlled substance

The list of the offenses is extensive, and it might seem like all hope is lost if you face any of these charges. However, with an experienced license defense attorney, you could continue your accounting practice.

Aggravating Factors

Examples of aggravating factors that attract more severe professional penalties include:

  • A valid client suffered financial losses
  • The accounting violation was committed voluntarily and well-planned
  • Committing the same professional misconduct that you had previously received disciplinary action for.
  • The CPA licensee knew that other individuals, particularly vulnerable ones, would suffer substantial harm.
  • The money loss is considered relatively high
  • You are on probation for previously committed violations
  • You violated your fiduciary duty by stealing a client’s funds

Mitigating Factors

Mitigating factors help a licensee secure a case dismissal or reduced sentences. These factors can include the following:

  • Low-risk of harm
  • The violation was just an honest mistake or due to sudden provocation
  • Your professional wrongdoing did not result in bodily harm to clients or the general public.
  • The licensee is remorseful
  • The alleged licensee demonstrates signs of recovery
  • The accused licensee's intentions were not just for monetary gain
  • The alleged licensee was less responsible than any other involved parties in the fraud scheme
  • In the whole investigative process, the licensee was cooperative with the investigators

You should hire a skilled and proven lawyer who can work tirelessly to secure your most favorable case outcome. With the help of your license defense lawyer, you can argue any of these mitigating factors and convince the board against imposing a revocation of your license. Instead, it may render a suspension or no disciplinary action at all. The CBA could also impose less restrictive probationary terms and early termination of your probation.

Find Qualified Legal Help Near Me

Suppose you are an accountant subject to an administrative complaint filed with the California Board of Accountancy. In that case, you might feel confused about your next move and unsure about your future and career. A complaint can stem from a wide range of circumstances and, if ignored, can have life-changing effects. Becoming a CPA takes years of dedication, and facing disciplinary action can be detrimental. At San Diego License Attorney, we understand you have mixed feelings and do not know what to do. We can guide you in protecting your interests, negotiating with the board, and representing you in administrative hearings. Call us at 858-665-2455 to speak to a trained and compassionate lawyer in a free initial consultation.