1.4 - Licensing and Disciplinary Systems Flashcards
Who governs the licensing process of CPAs & what is the requirement?
- State boards of accountancy govern this process
- requirements vary by state
What authority do state boards have
authority to suspend / revoke license
What are state CPA societies?
- Voluntary organizations and private
What is the AICPA?
- National level CPA society
- Private organization and voluntary
What authority does the AICPA have?
- Has no authority over non-members directly, state codes of conduct usually require adherence to AICPA rules
Identify the divisions or boards that are established to enforce discipline on a CPA
- Professional ethics division
- Joint trial board or full trial board
Identify a remedial measure implemented by the Professional Ethics Division of the AICPA as a form of discipline for CPAs
May have to take additional CPA courses
Automatic expulsion from the AICPA results without a hearing due to what types of misconduct
- Committing a felony
- Willfully failing to file a return
- Filing a fraudulent tax return
- Aiding in preparing a fraudulent tax return
- If state issued license is revolked
Does automatice expulsion from the AICPA bar an individual from the practice of public accounting?
No
How might the SEC discipline a CPA?
- May seek injunction to prohibit future violations
- Injunction - order to refrain CPA from perfoming a certain act
- May also conduct quasi-judicial hearings
- Quasi-judicial - exercising powers or functions that resemble those of a court or judge
What conditions does the SEC sanction?
- Do not have the qualifications to represent others
- Lacks character or integrity
- Has engaged in unethical or unprofessional conduct
- Has willfully violated, or aided and abetted the violation of federal securities laws
Identify convictions for SEC suspension
- Conviction of a felony
- Revocation of license to practice
- Being permanently enjoined from violation of federal securities acts
- Enjoin – to prohibit or restrain by an injunction
What powers do SEC proceedings have?
- Have prohibited individuals and accounting firms from accepting SEC clients
- Can initiate administrative proceedings against accounting firms
- May impose civil penalties
- Prohibit firm from appearing before SEC if engage in unethical or improper professional conduct
What (5) powers does the PCAOB (Public Company Accounting Oversight Board) have?
- Established to oversee auditors of companies
- Has rule-making authority regarding quality control, ethics and auditing standards
- Has substantially the same investigatory scope with respect to accountants as SEC
- May request that SEC issue subpoenas to 3rd parties
- Has no injunctive power but may institute administrative proceedings
Are accounting firms required to register with the PCAOB?
Yes
