Public Ethics Resource Center

If the CPA is not a member of the NYSSCPA, an ethics complaint can be filed through the AICPA, if the CPA is a member of the AICPA.

To determine whether an individual is a member of the AICPA, please call the AICPA Membership Department at 888-777-7077, menu option number 1 followed by option number 2.

To determine whether the CPA has a valid New York State license go to the New York State Education Department (NYSED) website for Online Verification Searches at NYS Professions: Online Verifications, select Accountant Certified Public and input the member’s last name. This search will give you the CPA’s license number.

A member may also be independently investigated by the NYSED. For more information about NYSED professional misconduct and discipline go to their website Professional Misconduct and Discipline.

To obtain a copy of the NYSED complaint form go to their website http://www.op.nysed.gov/opd-complaint.pdf.

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Fee Disputes

As a general rule, the Professional Ethics Committee does not investigate complaints involving fee disputes. However, if it is determined that a fee dispute involves any allegations of professional misconduct, those separate allegations may be investigated by the Committee.

Ethics Investigation Process

The PEC will conduct an initial review of a complaint and, if actionable, a member of the PEC will be assigned to investigate the complaint in accordance with the Professional Ethics Committee Procedures Manual and the Joint Ethics Enforcement Program (JEEP). See Professional Ethics Committee Procedures Manual and Joint Ethics Enforcement Program (JEEP) Manual of Procedures. All complaint letters are acknowledged. If an investigation will not be conducted, the complainant will be notified. The reasons for not investigating a complaint may be that the CPA is not a member; the allegations, if true, would not violate the Code; or the matter is already under investigation or has been previously investigated.

Investigations are conducted in a confidential manner, however the Committee is required to publish certain disciplinary actions (expulsion, suspension, admonishment or censure) in a Society publication and a Society press release pursuant to Bylaw section XII.12 See Explanation of Ethics Sanctions. The Committee is also required to disclose its investigations to the New York State Education Department and any other regulatory agencies under Bylaw Article XII.16, upon occurrence of any specified events in an investigation.See Bylaws Article XII.16. Complainants are notified of the Committee’s findings of no violation, or a finding of no further action because no evidence of a violation was obtained. Also, if disciplinary action is published in a Society publication, the complainant shall be notified of the results of the investigation.

The respondent is not told the identity of the complainant unless it is necessary in order for the respondent to defend against the allegations, such as in a records retention complaint. If the case investigator finds a violation of the Code, the investigator presents a case summary to a quorum of the PEC, with recommendations on findings and discipline. A majority vote of the Committee is required to find a member in violation of the Code or Bylaws and a separate vote is required on proposed discipline. Possible findings available to the PEC are “no further action” because evidence was not obtained or “no violation” based upon a finding of no prima facie evidence of a violation of the Code or Bylaws. The discipline imposed for a violation may include a confidential letter of required corrective action (RCA). An RCA is non-publishable discipline that usually involves successful completion of CPE, submitting subsequent reports and workpapers for review or submitting a pre-issuance review of reports by an outside party. Failure to comply with mandated corrective action can result in expulsion from the Society with publication.

The PEC may also offer a publishable Settlement Agreement to expel, suspend, censure or admonish a member. See Explanation of Ethics Sanctions. Settlement Agreements require the approval of the Joint Trial Board of the AICPA, but may be rejected by the member. Upon rejection, the case will be referred to the Joint Trial Board for hearing and final decision. Lastly, if the PEC concludes that a violation is of sufficient gravity to warrant formal disciplinary action, it may refer the matter to the Joint Trial Board, who may summon the respondent to a hearing.. The PEC cannot appeal a “not guilty” decision of a hearing panel, however, the respondent has a right to appeal a “guilty” decision of a hearing panel.

The PEC, in order to avoid duplicate investigations can offer alternative procedures when a member has been subject to regulatory enforcement proceedings by the Securities and Exchange Commission, the Public Company Accounting Oversight Board, the Internal Revenue Service or the NYS Office of Professional Discipline resulting in a sanction. The PEC may, at its discretion, offer the member a letter of required corrective action or a Settlement Agreement without an investigation or hearing. An initial evaluation based on reading the public record shall be made, and, if necessary, other limited inquiries, upon which the committee shall first determine that the member’s conduct or alleged conduct could constitute a violation of the Code.

Members whose conviction of felonies, or conviction of filing false tax returns or failure to file tax returns becomes final, or whose licenses are revoked are automatically expelled under the Bylaws and are not investigated by PEC. Such automatic actions are published in The Trusted Professional and in a Society press release. Pursuant to Bylaws, XII.1-b, the Committee may investigate any member who was “…finally convicted of a criminal offense which tends to discredit the profession.”

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Explanation of Ethics Sanctions

Expelled or Suspended

The PEC can expel a member or suspend membership for a period of up to two years through a Settlement Agreement entered into with the member and approved by the Joint Trial Board. During the suspension period, members must not identify themselves as a Society member on any letterhead or other written material, and may not vote, or hold a committee position or an office in the Society. In addition, the PEC or a Trial Board panel may direct a member to complete specified CPE courses or take other actions (e.g. submit subsequent pre or post issuance reports and/or workpapers for continued monitoring) during the suspension period.

Pursuant to Society Bylaws, the PEC can automatically expel or suspend a member without a hearing as a result of the member’s conviction of i) a crime defined as a felony under the law of the convicting jurisdiction., ii) the willful failure to file any income tax return which they are required by law to file, iii) the filing of a false or fraudulent income tax return, or iv) the willful aiding in the preparation and presentation of a false and fraudulent income tax return of a client. The Society Bylaws also require that if any member’s CPA license is suspended or revoked by a political authority issuing said license, the suspension or revocation of the license shall automatically effect, respectively, the suspension (for the same length of time) or the expulsion of such member from the Society.

Publication of expulsion and suspension is mandatory under Bylaw Article XII.12. The publication appears in The Trusted Professional and in a Society press release that is made available to the media.

Admonishment or Censure

The PEC can publicly admonish or censure a member who enters into a Settlement Agreement that includes discipline of admonishment or censure and is accepted by the Joint Trial Board.

Publication of admonishment or censure is mandatory under Bylaw Article XII.12. The publication appears in The Trusted Professional and in a Society press release that is made available to the media.

Required Corrective Action

The PEC issues letters of required corrective action when it concludes that remedial action is appropriate and the violation is not of sufficient gravity to warrant suspension or expulsion from membership. The PEC may issue a letter of required corrective action that directs a member to comply with one or more of the following: complete up to 80 hours (or more) of specified CPE courses, submit subsequent reports and workpapers for review, and/or submit to a pre-issuance review by an outside party of reports, financial statements, and working papers on selected engagements. The PEC will not publish the terms of the letter of required corrective action; however, the member may reject the letter and the PEC would then decide whether to refer the matter to the Joint Trial Board or whether no further action would be taken.

Subsequent Monitoring

A letter of corrective action or a settlement agreement may include a requirement for a pre-issuance review, when in the judgment of the Committee, the results of an investigation warrant such a requirement. The imposition of a pre-issuance review requires the respondent to hire an outside party, at his or her own expense, acceptable to the Committee to perform a pre-issuance review of the reports, financial statements, and working papers on selected audit, review and compilation engagements, and permit the outside party to report quarterly to the Committee on the respondent’s progress in complying with professional standards. Respondent shall have the pre-issuance review performed at his or her expense.

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Non-Disciplinary Disposition of an Investigation

No Violation

Upon completion of an investigation and upon finding no prima facie evidence of a violation of the Code or applicable conditions of the Society Bylaws, the PEC shall issue a finding of no violation and shall send a no violation letter to the respondent closing the investigation. The PEC shall also inform the complainant when an investigation results in a finding of no violation. See Bylaws Article XII.12.

No Further Action

If the investigation reveals no evidence of a violation was obtained, the Committee shall issue a finding of no further action and send a no further action letter to the respondent. The PEC shall also inform the complainant when an investigation results in a finding of no further action. See Bylaws Article XII.12.

Re-opening a Case

The Committee may re-open any case closed where it found no violation or no further action, if new information becomes available that warrants such action.

Concurrence

In investigations by the PEC where the respondent is both a member of the AICPA and the Society, concurrence with the proposed letter of required corrective action or proposed settlement terms shall be obtained from the AICPA together with appropriate documentation. Similarly, in investigations of a Society member by the AICPA, the AICPA will seek concurrence from the PEC on any proposed letter of required corrective action or proposed settlement agreement. No concurrence is required for a finding of no violation or no further action. Also, no concurrence is required for any findings or sanctions by the Joint Trial Board.

In any investigation where concurrence is not obtained from the AICPA on a Settlement Agreement, the PEC may decide to separately issue the Settlement Agreement with reference to the Respondent being only a member of the NYSSCPA.

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Useful Links

NYSSCPA Code of Professional Conduct

NYSSCPA Bylaws

AICPA Code of Professional Conduct

AICPA Ethics Resources

Rules of the New York State Board of Regents