June-Miller, Deborah of Saratoga Springs, NY

As a result of an investigation of alleged violations of the Code of Professional Conduct of the AICPA, Ms. June-Miller, with the firm of Reynolds & Miller, CPAs, PLLC, entered into a settlement agreement under the Joint Ethics Enforcement Program effective April 8, 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. June-Miller’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. June-Miller’s responses to such findings.  The ECA charged Ms. June-Miller with violations of the AICPA Code of Professional Conduct as follows:

Rule 201 – General Standards, B. Due Professional Care

The auditor’s report improperly indicates that the Schedule of Administrative Expenses included with the financial statements is a Department of Labor required schedule.

Rule 203 – Accounting Principles

The financial reports did not disclose the following:

  1. For assets and liabilities measured at fair value on a recurring basis, the fair market value disclosures (ASC 820-10-50);

  2. A description of the plan’s vesting (ASC 960-205-50); and

  3. Subsequent events disclosures (ASC 855-10-50).

Rule 501 – Acts Discreditable

As the owner responsible for the firm’s peer review compliance, Ms. June-Miller failed to ensure it complied with AICPA requirements to undergo a peer review.

Agreement:

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

  1. To waive her rights to a hearing under AICPA bylaws section 7.4.

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

  3. To comply immediately with professional standards applicable to the professional services she performs and to submit evidence of such compliance.

  4. To provide an attestation immediately, then every six months for a period of three years that she is no longer performing audit or review engagements. If she returns to performing such work, she agrees to the following:

    • To complete 48 hours of continuing professional education (CPE) courses (Auditing Employee Benefit Plans*; Upcoming Peer Review: Is Your Firm Ready?; Accounting and Auditing Update for Small Businesses; Annual Accounting and Auditing Workshop) within twelve  months of the effective date of this agreement and  provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).  *Only required if she returns to performing audits of employee benefit plans.                           

    • To hire an outside party, acceptable to the ECA to perform a pre-issuance review of the reports, financial statements, and working papers on all employee benefit plan audit engagements performed by her for one year from the date the reviewer has been approved by the ECA or until completion of the CPE above, if later. She must submit the names of the chosen reviewers to the ECA for approval no later than 30 days after the effective date of this agreement.

      She agrees to permit the outside party to report quarterly to the ECA on her progress in complying with this agreement as stated herein to comply with professional standards. The report should provide the reviewer’s comments in detail for each engagement and should include a description of the nature of the entity reviewed, the entity’s year end and the date of the review. The first report is due 120 days after the reviewer has been approved by the ECA with subsequent reports due every 90 days thereafter. She agrees to have this pre-issuance review performed at her expense. The ECA has the right to extend the period of time and number of engagements subject to pre-issuance review if there are deficiencies.

      She agrees to inform the ECA of any changes in the composition of her practice or changes in her role during the period she is subject to the pre-issuance reviews. If her practice changes and she is no longer involved with employee benefit plan audit engagements or no longer acts in a supervisory capacity on such engagements, she must inform the ECA of this change, and the ECA may require that she attest every six months for three years as to the nature of her practice. If, during the three-year attestation period she returns to performing such engagements, he must inform the ECA and undergo the pre-issuance reviews.

    • To submit six months after the completion of the pre-issuance review described above, a list of highest level of engagements (audits, reviews and compilations with note disclosures) that she performed in the period between the date of completion of those pre-issuance reviews and the end of the six-month period following completion of the pre-issuance reviews. The following information should be included regarding the engagements listed: number of hours spent on each engagement, her role and total hours on each engagement, level of professional services rendered, type of report issued, type of organization, and whether it was an initial engagement. The ECA will select one of these engagements for review. She will be informed of this selection and will be asked to submit information to include a copy of her report, the financial statements, and working papers related to that engagement for review by the ECA. The ECA may extend the period to select an engagement to ensure a suitable selection is available. A peer review undergone by her firm would not exempt her from this requirement.

      She agrees to inform the ECA of any changes in the composition of her practice or changes in her role until a suitable work product is selected for review. If her practice changes and she is no longer involved with audits, reviews or compilations with note disclosures or no longer acts in a supervisory capacity on such engagements, she must inform the ECA of this change, and the ECA may require that she attest every six months for three years as to the nature of her practice. If, during the three-year attestation period she returns to performing audits, reviews or compilations with note disclosures engagements, she must inform the ECA of this change, and the ECA will select a suitable work product for review.

      After an initial review of such report, financial statements, and working papers, the ECA may decide she has substantially complied with professional standards and close this matter. Or, the ECA may decide that an ethics investigation of the engagement she submitted is warranted. If at the conclusion of the investigation, the ECA finds that professional standards have in fact been violated, the ECA may refer the matter to the trial board for a hearing or take such other action as it deems appropriate.

    • To submit within 30-days of the resuming employee benefit plan audits, evidence that her firm has submitted an application to join the Employee Benefit Plan Audit Quality Center.  Upon membership in that Center, she agrees that her firm will comply with the directives of that Center.

  5. To be prohibited from serving as a member of any ethics or peer review committee of the AICPA until she has completed all directives in this letter. This restriction will be communicated to those responsible for appointments to such committees. In addition, if she applies to join any committee of the AICPA, she must inform those responsible for such appointments of the results of this ethics investigation. This requirement shall remain in effect until the ECA determines that the work product she submitted to comply with directive d. above substantially complies with professional standards.

  6. To be prohibited from teaching continuing professional education courses approved by the AICPA or the state CPA societies in accounting and auditing until she has completed all of the directives included in this letter. This restriction will be communicated to those responsible for engaging CPE instructors at the AICPA. This requirement shall remain in effect until the ECA determines that the work product she submitted to comply with directive d. above substantially complies with professional standards.

  7. To be prohibited from performing peer reviews in any capacity until the directives in this letter have been completed. This prohibition will remain in effect until the ECA determines that the work product she submitted to comply with directive d. above substantially complies with professional standards. This restriction will be communicated to her peer review oversight agency.

  8. To her suspension from membership in the AICPA for a period of two years from the effective date of this agreement.

  9. To schedule a peer review of her firm’s system of quality control for the year ended, June 30, 2015. The review should be scheduled through her firm’s administering entity within 60 days of the effective date of this agreement.  Ms. June-Miller must submit evidence of the scheduled review by submitting a copy of the review team approval letter issued by her firm’s administering entity. In addition, her firm’s peer review will be due to the ECA ten months after being scheduled.

  10. That the ECA shall publish her name, the name of her firm, the charges, and the terms of this settlement agreement.

  11. That the ECA shall provide a copy of this settlement agreement to the AICPA’s Peer Review Division staff, her peer review administering entities and her firm’s peer reviewer.

  12. That the ECA shall monitor her compliance with the terms of this settlement agreement and initiate an investigation where the ECA finds there has been noncompliance.