As a result of an investigation of alleged violations of the Code of Professional Conduct of the AICPA, Ms. Cremer-Waite, with the firm of Cremer and Associates, LLP, entered into a settlement agreement under the Joint Ethics Enforcement Program, effective March 2, 2016.
Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of the AICPA Professional Ethics Executive Committee) alleging a potential disciplinary matter with respect to Ms. Cremer-Waite’s failure to ensure her firm obtained an appropriate peer review.
The ECA reviewed the allegations in the referral and information publicly available on the United States Department of Labor’s EFAST website and Ms. Cremer-Waite’s responses to such findings. The ECA charged Ms. Cremer-Waite with violations of the AICPA Code of Professional Conduct as follows:
Rule 203 – Accounting Principles
1. The 2011 statement of net assets available for benefits failed to present the difference between fair value and contract value for the plan’s investment in fully-benefit-responsive contracts as an adjustment to net assets reflecting investments at fair value. (FASB ASC 962-325-35-5)
2. The 2011 statement of changes in net assets available for benefits incorrectly reversed the 2010 fair-value-to-contract-value amount and presented it as a positive adjustment to 2011 investment income. (FASB ASC 962-325-35-5)
3. The plan’s investments in pooled separate accounts were incorrectly presented and disclosed as mutual fund investments and common and collective trust investments. (FASB ASC 820)
Rule 501 – Acts Discreditable
As the partner responsible for her firm’s peer review compliance, Ms. Cremer-Waite failed to ensure it complied with the AICPA membership requirement to undergo a peer review.
In consideration of the ECA forgoing further investigation of Ms. Cremer-Waite’s conduct as described above and in consideration of the ECA forgoing any further proceedings in the matter, Ms. Cremer-Waite agreed as follows:
a. To waive her right to a hearing under AICPA bylaws section 7.4.
b. To neither admit nor deny the above specified charges.
c. To her suspension from membership in the AICPA for a period of two years from the effective date of this agreement.
d. To complete 21 hours of continuing professional education (CPE) courses (Auditing Employee Benefit Plans; Get Ready for Peer Review-Upcoming Peer Review: Is Your Firm Ready?;) within three months of the effective date of this agreement and provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).
e. To schedule a system peer review of her firm. The review should be scheduled through her firm’s administering entity within 60 days of the effective date of this agreement and she must submit evidence of the scheduled system review by submitting a copy of the review team approval letter issued by her firm’s administering entity. The peer review must cover a one year period that ends July 31, 2015. Her firm’s accepted peer review documents will be due to the ECA within 10 months of the effective date of this agreement.
f. That the ECA shall publish her name, the name of her firm, the charges, and the terms of this settlement agreement.