By Jay Dismukes

The chair of the New York State Society of CPAs’ Professional Ethics Committee (PEC) has been nominated to sit on the Joint Trial Board, the American Institute of CPAs announced last month.

Beginning with her election at the fall AICPA Council meeting, Rona L. Cherno will serve a three-year term as a member of the Joint Trial Board of the AICPA and participating state accounting societies.

When the PEC determines that a violation of the Code of Professional Conduct or Bylaws is of sufficient gravity to warrant formal disciplinary action such as suspension or expulsion from membership, it refers the case to the Joint Trial Board for a hearing. The Joint Trial Board is composed of at least 36 members, all of whom are elected to a three-year term by the AICPA Council. Panels of five members of the Joint Trial Board are set up to hear the cases. Results of trial board hearings of NYSSCPA members are published in The Trusted Professional.

The Joint Trial Board also has the authority to receive and act on petitions requesting a review of a decision by the Peer Review Board terminating a firm’s participation in the peer review program.

The PEC

A member of the Society for more than 20 years, Cherno says her eight-year service on the PEC has been “incredible,” and her shift to the Joint Trial Board is a “natural progression.”

“This committee doesn’t just do discipline. One of our objectives is to educate our members,” Cherno said of the PEC. “I think that is an important aspect of being an accounting professional: to be involved in that way, to be supportive, to try to improve the role of the CPA and remind our members what their responsibility is.” She added that the committee also answers general inquiries from the public and members, and directs complainants to the proper regulatory body if a matter falls outside of its authority, so that problems “don’t fall through the cracks.”

According to Cherno, the committee typically handles two kinds of cases: technical ones and those that involve behavioral standards in which there is an accusation of a code violation, such as lack of independence or failure to return client records. The technical cases usually stem from a practitioner’s failure to adhere to the profession’s educational process, rules, procedures, standards and expectations of regulatory reporting.

“It saddens us to see that professionals still don’t say to their clients, ‘I can’t do this. I will find you somebody who can or I will learn how to do it and next year I’ll do it, but I don’t have the expertise to do it now,’” Cherno said.

Appearance vs. Reality

Despite the highly publicized financial reporting scandals of the last two years, Cherno said she does not believe there has been an increase in cases during the course of her service on the PEC. However, she recognizes that the disappointment of people in the profession is “visible” and expectations for CPAs to fulfill their ethical obligations are very high.

“I think we have a role in saying that we are assuming responsibility, that we’ve learned from the mistakes of our peers and the mistakes of others. And we don’t want to repeat that,” Cherno said.

The Society, Cherno believes, has done a good job in tackling that responsibility, helping to ensure that the renewed focus on ethics continues. Among other things, the PEC is developing a brochure on ethics for firms, and is attempting to better inform the membership about its role. Last November, the Society also appointed a task force to examine ethics and peer review.