Strauss, Susan of Teaneck NJ

As a result of an investigation of alleged violations of the Code of Professional Conduct of the AICPA, Ms. Strauss, with the firm of B. Strauss, LLC 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. Strauss’ failure to ensure her firm obtained an appropriate peer review and her performance of professional services on the audit of the financial statements of an employee benefit plan audit as of and for the year ended December 31, 2013.

The ECA reviewed the allegations in the referrals and information publicly available on the United States Department of Labor’s EFAST website and Ms. Strauss’ responses to such findings. The ECA charged Ms. Strauss with violations of the AICPA Code of Professional Conduct as follows:

Rule 203 – Accounting Principles

  1. The financial statements did not disclose the following:

    1. For assets and liabilities measured at fair value on a recurring basis, the disclosures required by FASB ASC 820-10-50;

    2. Subsequent events disclosures required by FASB ASC 855-10-50;

    3. The basis for determining employer contributions (FASB ASC 962-205-50);

    4. Participant vesting in contributions (FASB ASC 962-205-50)

  2. The financial statements improperly disclosed the existence of benefit responsive contracts. (FASB ASC 962-205-50-1)

  3. Interest on participant notes receivable was improperly included in investment income. (FASB ASC 962-205-45-7)

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

  1. As the partner responsible for her firm’s peer review compliance, Ms. Strauss failed to ensure it complied with state board and AICPA requirements to undergo a peer review.

  2. The Schedule of Assets Held at End of Year was improperly included as a basic financial statement, was improperly titled, failed to include participant loans and did not identify parties-in-interest as required by DOL 29 CFR 2520.103-10.

Agreement:

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

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

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

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

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

  5. To complete 28.5 hours of continuing professional education (CPE) courses (Accounting and Auditing Update for Small Businesses; Upcoming Peer Review: Is Your Firm Ready?; Audit Workpapers: Documenting and Reviewing Field work) within 6 months of the effective date of the agreement and provide evidence of such completion (e.g. attendance sheets, course completion certificates, etc.).

  6. To provide an attestation immediately and every 6 months for a period of 3 years that she is no longer performing employee benefit plan engagements. If she returns to performing such work, she agrees:

    • To complete a 12 hour continuing professional education (CPE) course (Auditing Employee Benefit Plans) within 12 months of the effective date of this agreement and provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).

    • To comply with directive 4. above, 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 audits performed by her for one year from the date the reviewer has been approved by the ECA or until completion of the CPE specified in directive 6 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 audits 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 she must inform the ECA and undergo the pre-issuance reviews.

    • To further comply with directive 4. above, submit six months after the completion of the pre-issuance reviews above, a list of the highest level of engagements (audits, reviews and compilations with 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 the 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 employee benefit plans audits 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 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 after resuming employee benefit plan engagements, 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.

  7. To be prohibited from teaching continuing professional education courses approved by the AICPA or the state societies in auditing and accounting and employee benefit plans 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 submitted to comply with directive 6. above substantially complies with professional standards.

  8. To be prohibited from serving as a member of any ethics or peer review committee of the AICPA and the state societies 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 or the state societies, 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 submitted to comply with directive 6. above substantially complies with professional standards.

  9. 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 6. above substantially complies with professional standards. This restriction will be communicated to her peer review oversight agency.

  10. 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.

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

  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.