Olagbemi, Oladapo A. of San Diego, CA

As a result of an investigation of alleged violations of the codes of professional conduct of the AICPA, Mr. Olagbemi, with the firm of Oladapo A. Olagbemi, CPA entered into a settlement agreement under the Joint Ethics Enforcement Program, effective January 3, 2018.

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 Mr. Olagbemi’s failure to ensure his firm obtained an appropriate peer review.  

The ECA reviewed the allegations in the complaint, information publicly available on the United States Department of Labor’s EFAST website and Mr. Olagbemi’s responses to such allegations.  Based on this information, the ECA charged Mr. Olagbemi with violations of the AICPA Code of Professional Conduct as follows: 

Rule 201 - General Standards, A. Professional Competence

The auditor undertook an engagement that he could not complete in accordance with professional standards.

Rule 202 – Compliance with Standards

1.    The financial statements omitted all required note disclosures. (SAS 32; AU §431)

2.    The audit report failed to comply with professional standards as the auditor improperly opines on the deductions and recordkeeping. (AU §508)

3.    The auditor’s report failed to include the required elements per SAS 58 and includes language for both a full scope and limited scope audit.

Rule 501 – Acts Discreditable

The respondent failed to cooperate in the investigation by providing responses to interrogatories.

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

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

Agreement:

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

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

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

c.     To his suspension from membership in the AICPA 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 from using any AICPA credentials or certificates.

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

e.    To complete the 26 hours of continuing professional education (CPE) courses (Audit Workpapers: Documenting & Reviewing Field Work; Upcoming Peer Review: Is Your Firm Ready?; Accounting and Auditing Update for Small Businesses) within six months of the effective date of this agreement and provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).

f.      To comply with directive d., above, he 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 reviews and compilations performed by him for one year from the date the reviewer has been approved by the ECA.  He must submit the names of the chosen reviewers to the ECA for approval no later than 30 days of the effective date of this agreement.

He agrees to permit the outside party to report quarterly to the ECA on his 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. If none of the engagements selected for pre-issuance review were performed during a reporting period, he agrees to inform the ECA of such. He agrees to have this pre-issuance review performed at his 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 his practice, changes in his role or if he has not performed any reviews or compilation engagements during the period he is subject to the pre-issuance reviews. If his practice changes and he is no longer involved compilation or review engagements, no longer acts in a supervisory capacity on such engagements or he has not performed such engagements during the above specified period, 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 undergo the required pre-issuance reviews.

g.    To further comply with directive d., above, submit, six months after completion of the pre-issuance reviews, a list of the highest level (audit, review, compilation with note disclosures) of engagements that he performed in the six month period following the date he completed the pre-issuance reviews.

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, changes in his role or if he has not performed any employee benefit plan audit engagements, until a suitable work product is selected for review. If his practice changes and he is no longer involved with employee benefit plan audit engagements, no longer acts in a supervisory capacity on such engagements or he has not performed such engagements during the above specified period, 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 AICPA joint trial board for a hearing or take such other action as it deems appropriate.

h.    To provide an attestation immediately, then every six months for a period of three years that he is no longer performing audits of employee benefit plans. If he returns to performing such work, he agrees:

  • To complete 20 hours of continuing professional education (CPE) courses (Auditing Defined Contribution Plans; Auditing Employee Benefit Plans) prior to commencing such work and provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).
  • To further comply with directive d., above, he 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 employee benefit plan audit engagements performed by him for one year from the date the reviewer has been approved by the ECA.  He must submit the names of the chosen reviewers to the ECA for approval no later than 30 days of returning to performing audits of employee benefit plans.

    He agrees to permit the outside party to report quarterly to the ECA on his 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. If none of the engagements selected for pre-issuance review were performed during a reporting period, he agrees to inform the ECA of such. He agrees to have this pre-issuance review performed at his 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 his practice, changes in his role or if he has not performed any employee benefit audit engagements during the period he is subject to the pre-issuance reviews. If his practice changes and he is no longer involved with employee benefit plan audit engagements, no longer acts in a supervisory capacity on such engagements or he has not performed such engagements during the above specified period, 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 undergo the required pre-issuance reviews.
  • To further comply with directive d., above, submit, six months after completion of the pre-issuance reviews, a list of the highest level (audits, reviews, and compilations with note disclosures) of engagements that he performed in the six month period following the date he completed the pre-issuance reviews.

    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, changes in his role or if he has not performed audits, reviews, and compilations with note disclosures, until a suitable work product is selected for review. If his practice changes and he is no longer involved with audits, reviews, and compilations with note disclosures, no longer acts in a supervisory capacity on such engagements or he has not performed such engagements during the above specified period, 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 AICPA joint trial board for a hearing or take such other action as it deems appropriate.

i.      Provide evidence the firm is enrolled in peer review within 60 days of the effective date of this agreement.

j.      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 products he submitted to comply with directives g. and h., above, substantially complies with professional standards. This prohibition will be communicated to his peer review oversight agency. 

k.     To be prohibited from serving as a member of any ethics or peer review committee of the AICPA 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, 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 he submitted to comply with directive g. and h. above, substantially complies with professional standards. 

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

m.   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.

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

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.