Tarantino, Peter J. of Roswell, GA

As a result of an investigation of alleged violations of the codes of professional conduct of the AICPA and the Georgia Society of CPAs, Mr. Tarantino, with the firm of Tarantino & Co., entered into a settlement agreement under the Joint Ethics Enforcement Program effective December 2, 2016.

Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of the AICPA Professional Ethics Executive Committee and the Georgia Society of CPAs’ Professional Ethics Committee) alleging a potential disciplinary matter with respect to Mr. Tarantino’s failure to ensure his 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 relating to the financial statements of an employee benefit plan and Mr. Tarantino’s responses to such allegations. The ECA charged Mr. Tarantino with violations of the AICPA and Georgia Society of CPAs’ codes of professional conduct as follows:

Rule 201 – General Standards, B. Due Professional Care

The notes to the financial statements indicate the plan investments are in mutual funds however plan investments on the Form 5500 are pooled separate accounts.

Rule 202 – Compliance with Standards

The auditor’s report does not indicate the financial statements subject to audit and does not indicate the level of assurance on the 2010 financial statements included in the financial statements or express an opinion on them. (AU 508.04)

Rule 203 – Accounting Principles

  1. The financial statements failed to make certain disclosures (or made certain disclosures improperly) required under FASB ASC 820 for assets measured at fair market value on a recurring basis.

  2. The financial statement failed to make the required disclosures regarding subsequent events. (FASB ASC 855-10-50)

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

  1. As the partner responsible for the firm’s peer review compliance, Mr. Tarantino failed to ensure it complied with state board requirements and those of the AICPA and Georgia Society of CPAs to undergo a peer review.

  2. The Schedule of Assets Held for Investment Purposes at End of Year improperly excluded participant loans. (AAG-EBP Exhibit A-1).

Agreement:

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

  1. To waive his rights to a hearing under AICPA bylaws section 7.4 and Georgia Society of CPAs bylaws Article VII.

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

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

  4. To his suspension from membership in the AICPA and the Georgia Society of CPAs for a period of two years from the effective date of this agreement. During the period of suspension, he is prohibited from representing himself as a member of the AICPA and the Georgia Society of CPAs and from using any AICPA and Georgia Society of CPAs’ credentials.

  5. To provide an attestation immediately, then every six months for a period of three years that he is no longer performing attest engagements. If he returns to performing such work, he agrees:

    • To complete 47.5 hours of continuing professional education (CPE) courses (Auditing Employee Benefit Plans*; Auditing Defined Contribution Plans*; Compilation and Review Update; Accounting and Auditing Update for Small Businesses) prior to commencing attest engagements and provide evidence of completion (e.g., attendance sheets, course completion certificates, etc.)
      *Required if he returns to audits of employee benefit plans.

    • To comply with directive c. above, submit six months after completion of the CPE described in e. above a list of the highest level (audits, reviews, and compilations with note disclosures) of engagements that he performed in the period between the date of completion of those CPE courses and the end of the six-month period following completion of the CPE courses. The following information should be included regarding the engagements listed: number of hours spent on the engagement, his 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. He will be informed of this selection and will be asked to submit information to include a copy of his 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 his firm would not exempt him from this requirement.

      He agrees to inform the ECA of any changes in the composition of his practice or changes in his role until a suitable work product is selected for review. If his practice changes and he is no longer involved with attest engagements or no longer acts in a supervisory capacity on such engagements, he must inform the ECA of this change, and the ECA may require that he attest every six months for three years as to the nature of his practice. If, during the three-year attestation period he returns to performing such engagements, he 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 he has substantially complied with professional standards and close this matter. Or, the ECA may decide that an ethics investigation of the engagement he 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 resuming audits of employee benefit plans evidence that his firm has submitted an application to join the Employee Benefit Plan Audit Quality Center. Upon membership in that Center, he agrees that his firm will comply with the directives of that Center.

    • To schedule a system peer review of his firm. The review should be scheduled through his firm’s administering entity within 60 days of resuming attest services and he must submit evidence of the scheduled review by submitting a copy of the review team approval letter issued by his firm’s administering entity. His firm’s accepted peer review documents will be due to the ECA ten (10) months of resuming attest engagements.

  6. 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 he submitted to comply with directive e. above substantially complies with professional standards. This restriction will be communicated to his peer review oversight agency.

  7. To be prohibited from serving as a member of any ethics or peer review committee of the AICPA or the state societies until he has completed all directives in this letter. This restriction will be communicated to those responsible for appointments to such committees. In addition, if he applies to join any other committee of the AICPA or the state societies, he 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 e. above substantially complies with professional standards.

  8. To be prohibited from teaching continuing professional education courses approved by the AICPA or the Georgia Society of CPAs in areas of accounting, auditing and employee benefit plans until he 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 and the Georgia Society of CPAs. This requirement shall remain in effect until the ECA determines that the work product he submitted to comply with directives e. above substantially complies with professional standards.

  9. 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.

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

  11. 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.