Moock, James I. of Lincoln, NE

As a result of an investigation of alleged violations of the codes of professional conduct of the AICPA and the Nebraska Society of CPAs, Mr. Moock, with the firm of James Moock, CPA entered into a settlement agreement under the Joint Ethics Enforcement Program, effective October 9, 2017.

Information came to the attention of the Ethics Charging Authority (ECA) (comprised of the AICPA Professional Ethics Executive Committee and the Nebraska Society of CPAs’ Professional Ethics Committee) alleging a potential disciplinary matter with respect to Mr. Moock’s performance of professional services on the audit of the financial statements of a construction company as of and for the fiscal year ended June 30, 2015.

The ECA reviewed the auditor’s report, financial statements and certain workpapers, Mr. Moock’s responses to such findings as well as other relevant documents Mr. Moock submitted to support his responses. Based on this information, there appears to be prima facie evidence of violations of the rules of the AICPA and the Nebraska Society of CPAs’ codes of professional conduct as follows:

1.310.001 Compliance with Standards

The auditor failed to obtain sufficient appropriate audit evidence in the following areas:

  • Accounts receivable;
  • Inventory;
  • Notes payable/long-term debt; and
  • Internal control. (AU-C 500)

Agreement:

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

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

b.   To waive rights to a hearing under AICPA bylaws section 7.4 and the Nebraska Society of CPAs bylaw Article XII.

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

d.   To suspension from membership in the AICPA and the Nebraska Society of CPAs for a period of one year from the effective date of this agreement. During the period of suspension, is prohibited from representing himself as a member of the AICPA and the Nebraska Society of CPAs and from using any AICPA credentials. 

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

f.    To complete 35 hours of continuing professional education (CPE) courses (Audit Workpapers: Documenting Field Work; Audit Workpapers: Reviewing Field Work Documentation; Internal Control and Risk Assessment: Key Factors in a Successful Audit; Construction Contractors: Accounting, Auditing, and Tax; Real-World Business Ethics for CPAs in A&A) within months of the effective date of this agreement and provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).

g.   To comply with directive e. above, agrees 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 audits performed by for one year from the date the reviewer has been approved by the ECA. must submit the name of the chosen reviewer to the ECA for approval no later than 30 days from the date signs this agreement.

He agrees to permit the outside party to report quarterly to the ECA on progress in complying with this agreement as stated herein to comply with professional standards.

The first report is due 120 days after the reviewer has been approved by the ECA with subsequent reports due every 90 days thereafter. agrees to have this pre-issuance review performed at 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.

He agrees to inform the ECA of any changes in the composition of practice, changes in his role or if he has not performed any during the period is subject to the pre-issuance reviews. If practice changes and is no longer involved with , no longer acts in a supervisory capacity on such engagements or has not performed such engagements during the above specified period, must inform the ECA of this change and the ECA may require that attest every six months for three years as to the nature of practice. If, during the three-year attestation period, returns to performing such engagements, must inform the ECA of this change and undergo the required pre-issuance reviews.

h.   To further comply with directive e. above, submit, months after completion of the , a list of the highest level (audits, reviews, and compilations with note disclosures) of engagements that performed in the month period following the date completed the .

The ECA will select one of these engagements for review. will be informed of this selection and will be asked to submit information to include a copy of 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 firm would not exempt from this requirement.

He agrees to inform the ECA of any changes in the composition of practice, changes in role or if has not performed any audits, reviews, or compilations with note disclosures, until a suitable work product is selected for review. If practice changes and is no longer involved with any audits, reviews, or compilations with note disclosures, no longer acts in a supervisory capacity on such engagements or has not performed such engagements during the above specified period, must inform the ECA of this change and the ECA may require that attest every six months for three years as to the nature of practice. If, during the three-year attestation period, returns to performing such engagements, 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 has substantially complied with professional standards and close this matter. Or, the ECA may decide that an ethics investigation of the engagement 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 AICPA joint trial board for a hearing or take such other action as it deems appropriate.

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

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

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

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

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

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