Baugh Jr., Ernest F. of Chattanooga, TN

October 7, 2019

As a result of an investigation of alleged violations of the codes of professional conduct of the AICPA and the Tennessee Society of CPAs, Mr. Baugh, formerly with the firm of Mayer Hoffman McCann P.C., entered into a settlement agreement under the Joint Ethics Enforcement Program, effective August 21, 2019.

Information came to the attention of the ethics charging authority (ECA ― AICPA Professional Ethics Executive Committee and Tennessee Society of CPAs Professional Ethics Committee) alleging a potential disciplinary matter with respect to Mr. Baugh’s performance of professional services related to the audit of the 2012 financial statements of a public entity. 

The ECA reviewed the SEC Accounting and Auditing Enforcement Release (AAER) No. 3658 and Mr. Baugh’s responses to such findings as well as other relevant documents Mr. Baugh submitted to support his responses. Based on this information, the ECA charged Mr. Baugh with a violation of the codes of professional conduct of the AICPA and Tennessee Society of CPAs as follows:

Rule 201 – General Standards, specifically b. Due Professional Care (now 1.300.001)

For failing to exercise due professional care when resolving an independence issue for his former firm.

Agreement

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

a.      To waive his rights to a hearing under AICPA bylaws section 7.4 and the Tennessee Society of CPAs bylaw Article 6, Section 6.6.

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

c.     To being admonished by the AICPA and the Tennessee Society of CPAs.

d.     To comply immediately with professional standards applicable to the professional services he performs.

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