Black, Alex Kelly of Baton Rouge, LA

As a result of an investigation of the alleged violations of the codes of professional conduct of the AICPA and the Society of Louisiana CPAs, Mr. Black, with the firm of A. Kelly Black, CPA, entered into a settlement agreement under the Joint Ethics Enforcement Program, effective May 1, 2015.

Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of the AICPA Professional Ethics Executive Committee and the Society of Louisiana CPAs Professional Ethics Committee) alleging a potential disciplinary matter with respect to Mr. Black’s performance of professional services on the audit of the financial statements of an employee benefit plan as of and for the year ended December 31, 2011.

The ECA reviewed the auditor’s report, financial statements, and working papers for the engagement as well as Mr. Black’s responses and other relevant documents he submitted to support his response.  Based on this information, there appears to be prima facie evidence of violations of the rules of the AICPA’s and Society of Louisiana’s CPAs’ codes of professional conduct as follows:

Rule 201 – General Standards B. – Due Professional Care

The financial statements improperly states that employees are immediately vested in employer contributions which is inconsistent with the plan termination note.

Rule 202 – Compliance with Standards

  1. The auditor failed to obtain sufficient appropriate audit evidence in the areas of contributions received and receivable, participant data and benefit payments. (SAS 106, AU §326)

  2. The disclosures in the original financial statements that described investment balances certified by the plan’s trustee and not subject to audit procedures incorrectly included noninvestment information. (AAG-EBP 5.13)

  3. The Statement of Net Assets did not reflect the adjustment from fair market value to contract value for a benefit responsive contract. In addition, the benefit responsive contract was included in the fair value disclosures. (AAG-EBP 3.27)

Rule 203 – Accounting Principles

  1. The original financial statements failed to disclose the following:

    1. The date through which subsequent events were reviewed.   (FASB ASC 855)

    2. The basis used to allocate asset values to participant accounts. (FASB ASC 962-  20550)

    3. Disposition of forfeitures (FASB ASC 962-325-50)

  2. The original and revised financial statements failed to make appropriate disclosures for assets measured at fair value on a recurring basis. (FASB ASC 820-10)

  3. The revised Statement of Nets Assets Available for Benefits is not comparative.  (FASB ASC 205-10-45-4)

  4. The original and revised Statement of Changes in Net Assets failed to include investment income exclusive of changes in fair value. (FASB ASC 962-205-45)

Rule 501 – Acts Discreditable

The auditor misrepresented his practice to his peer reviewer and as a result, obtained an inadequate peer review.

Rule 501, Interpretation 5 – Failure to follow requirements of governmental bodies, commissions, or other regulatory agencies

The original and reissued schedule of assets held failed to identify parties in interest to the plan. In addition, the original and reissued schedule of assets held failed to include loans to participants with interest rates. (AAG-EBP App A)


In consideration of the ECA forgoing further investigation of Mr. Black’s conduct as described above and in consideration of the ECA forgoing any further proceedings in the matter, Mr. Black agreed as follows:

  1. To waive his rights to further investigation of this matter in accordance with the Joint Ethics Enforcement Program (JEEP) Manual of Procedures.

  2. To waive his rights to a hearing under AICPA bylaws section 7.4 and the Society of Louisiana CPAs bylaws section 8.2.

  3. To neither admit nor deny the above specified charges.

  4. To be expelled from membership in the AICPA and the Society of Louisiana CPAs upon the effective date of this agreement.

  5. That the ECA shall publish his name, the name of his current firm, the charges, and the terms of this settlement agreement.