As a result of an investigation of alleged violations of the AICPA and Maryland Association of CPAs’ codes of professional conduct, Ms. Brown, with the firm of A. Brown & Associates, LLC entered into a settlement agreement under the Joint Ethics Enforcement Program, effective March 7, 2018.
Information came to the attention of the Ethics Charging Authority (ECA) (comprised of the AICPA Professional Ethics Executive Committee and the Maryland Association of CPAs Professional Ethics Committee) alleging a potential disciplinary matter with respect to Ms. Brown’s performance of professional services on the audit of the financial statements of an employee benefit plan as of and for the year ended December 31, 2013.
The ECA reviewed information from the Department of Labor’s E-fast website, the financial statements and Ms. Brown’s responses to the ECA’s inquiries as well as relevant documents Ms. Brown submitted to support her responses. Based on this information, there appears to be prima facie evidence of a violation by Ms. Brown of Rule 501, Interpretation 501 – 5 Failure to follow requirements of governmental bodies, commissions, or other regulatory agencies of the rules of the AICPA and the Maryland Association of CPAs codes of professional conduct as follows:
As the partner responsible for peer review compliance, Ms. Brown failed to ensure the firm complied with the requirements of the Maryland Board of Accountancy and those of the AICPA to undergo a peer review.
In consideration of the ECA forgoing further investigation of Ms. Brown’s conduct as described above and in consideration of the ECA forgoing any further proceedings in the matter, Ms. Brown agreed as follows:
a. To waive her rights to further investigation of this matter in accordance with the Joint Ethics Enforcement Program (JEEP) Manual of Procedures.
b. To waive her rights to a hearing under AICPA bylaws section 7.4 and the Maryland Association of CPAs Article 14.
c. To neither admit nor deny the above specified charges.
d. To her suspension from membership in the AICPA and the Maryland Association of CPAs for a period of two years from the effective date of this agreement. During the period of suspension, she is prohibited from representing herself as a member of the AICPA and the Maryland Association of CPAs and from using any AICPA credentials or certificates.
e. To comply immediately with professional standards applicable to the professional services she performs.
f. To provide an attestation immediately, then every six months for a period of three years that she is no longer performing audits, reviews, and compilations. If she returns to performing such work, she agrees:
· To complete a 6 hour continuing professional education (CPE) course (Upcoming Peer Review: Is Your Firm Ready?) prior to commencing such work and provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).
· To schedule a peer review of her firm. The review should be scheduled through her firm’s administering entity within 60 days of the acceptance of such an engagement and she must submit evidence of the scheduled review by submitting a copy of the review team approval letter issued by her firm’s administering entity. Her firm’s accepted peer review documents will be due to the ECA within 10 months of scheduling the peer review.
g. 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 directives above are complete. This prohibition will be communicated to her peer review oversight agency.
h. 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, if applicable.
i. That the ECA shall publish her name, the name of her firm, the charges, and the terms of this settlement agreement.
j. 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.