Public accounting is a highly regulated profession. So, a professional license is mandatory to practice public accounting in California.

As a certified public accountant (CPA), you have great responsibilities. One of them is monitoring a business's financial transactions. Your responsibilities require keen attention to every detail. When many people rely on your job, and how you execute it, even a trivial error can seem suspicious. If you face accusations of accounting violations, you need legal help.

At Santa Cruz License Attorney, we provide the legal representation you need. Our lawyers have extensive experience protecting the licenses of different professionals, including CPAs. We can help you defend yours and obtain the best possible outcome. All you need to do is call us.

About The California Board of Accountancy (CBA)

The CBA is the body regulating California’s Certified Public Accountants. This CBA acts according to state laws and regulations. The regulations include the Accountancy Act and a series of CBA regulations. The CBA has a long list of rules and regulations for CPAs. For example, it has rules on:

  • How the Peer Review System should work,
  • The number of continuing education hours you need to renew your professional license. (In this case, it is eighty every twenty-four months).

The CBA’s mission is to safeguard consumers. It does this by ensuring only qualified license holders practice certified public accounting. It also ensures the license practice per the laid-down professional standards. The board derives authority from three bodies. These are:

  • The California Accountancy Act,
  • The California Code of Regulations, and
  • The Business and Professions Code.

Since its inception, the CBA has regulated accounting practices in California. By the Accountancy Act’s authority, the CBA has the following responsibilities:

  • It ensures only people with particular qualifications can take the Uniform CPA exam.
  • It licenses PAs (public accountants) and individual CPAs.
  • It certifies and renews professional licenses of PAs and CPAs.
  • It registers accounting corporations and accounting partnerships.
  • It imposes discipline against license holders for violating CBA regulations and the CAA.
  • It monitors adherence to peer review and continuing education requirements.
  • It reviews work products of accounting firms, PAs, and CPAs. The review is to ensure compliance with professional standards.

The board regulates public accounting practice in California. It can take action against any certificate or permit due to committed violations. These actions include suspending, revoking, or declining to renew the certificate or permit. Through its enforcement unit, the board,

  • Receives and probes complaints.
  • Instigates and carries out hearings or investigations.
  • Acquires evidence associated with incidents involving CPAs’ accounting firms’ and PAs’ conduct.

It does all this with help from the EAC (Enforcement Advisory Committee).

The CBA Regulations and CAA provide grounds for enforcement of discipline. Surrendering your license does not prevent the CBA from proceeding with investigations. Nor will it stop pursuing disciplinary proceedings against. Surrendering your license will also not prevent its revocation or suspension.

The Role of Certified Public Accountants

CPAs serve as the financial backbone for individuals and businesses. They provide crucial services that realize financial success. Here are some of their roles:

  • Personal financial planning: Accountants provide individual financial planning services. They assist clients in managing their finances and planning for retirement. They also help them achieve their long-term financial goals.
  • Business valuation: CPAs help businesses establish the value of their liabilities and assets. This is crucial for companies looking to make informed decisions about various factors.
  • Forensic accounting: Certified public accountants specialize in forensic accounting, which entails probing financial fraud and discrepancies. Their expertise assists in uncovering financial fraud and provides expert witness testimony in court proceedings.
  • Financial consulting: Certified public accountants provide financial consulting services. Consequently, they assist businesses in making informed financial-related decisions. CPAs create budgets, review and analyze financial data, and provide strategic counsel. This helps companies and individuals achieve their monetary goals.
  • Tax preparation and planning: CPAs help businesses and individuals with tax preparation. They also help with tax planning. They stay up-to-date with the most recent tax regulations and laws. Thus, they can assist clients in maximizing tax savings and minimizing tax liabilities.
  • Audit and assurance: CPAs offer assurance and audit services crucial for businesses. The services ensure the reliability and accuracy of financial information and statements. They assist businesses in maintaining transparency and building stakeholder trust.

Since a Certified Public Accountant’s toolbox incorporates everything, including

  • Financial statements.
  • Tax preparation.
  • Financial planning.
  • Internal auditing.
  • income tax.
  • Forensic accounting.

Their primary role is to assist businesses and individuals in thriving. Note that all certified public accountants are accountants. Yet, not every accountant is a certified public accountant.

CPAs differ from accountants. Anyone who performs any form of accounting work can refer to themselves as an accountant, even if they do not have an accounting degree. However, a CPA is a person who has earned a professional title through education. They also have the license and experience.

To be a CPA, someone must finish an accounting program. They must also amass professional accounting experience. Apart from these two factors, they must take and pass the Uniform CPA exam before licensing. The AICPA (American Institute of CPAs) sets and grades the examination. Only after licensing can a person use the title of CPA.

Despite all the requirements to qualify as a CPA, losing the professional license is easy. CPAs face various accusations because of their role in managing businesses’ money. These are often related to financial violations like embezzlement, money laundering, and fraud. An unintended mistake could also jeopardize an accountant’s license.

Thus, seek legal counsel immediately if someone has brought an accusation against you. A professional license defense attorney understands how essential CPAs are. They also know how risky accounting work can be, which could jeopardize your license and job. Lawyers also understand that CPAs often face exaggerated or false accusations. And they will defend you and help you achieve the best possible outcome for your case.

The CPA License Defense Process

The CPA license defense process commences when the board receives a complaint. The CBA receives complaints from various parties. These include police agencies, professional societies, consumers, and other government bodies. It also generates internal complaints from CBA committees and the licensing division. Internal complaints can also come from the enforcement unit.

The board’s enforcement unit’s staff also monitors news about unlicensed practices. They look for news showing violations of the CBA regulations and the CAA. The board can also receive information on professional misconduct through mandatory self-reporting.

Once the board learns of a complaint against you, its staff might investigate. The board’s Enforcement Division employs technical and nontechnical approaches in its investigations. The CBA engages external experts on occasion.

In cases that involve unlicensed accounting practice, the DCA (Department of Consumer Affairs). The investigation might also entail appearing in person at an unofficial hearing. That is, appearing at the board’s enforcement advisory committee to give your side of the story. The committee will also need you to answer questions from board members.

Note that whenever the board is investigating you, it must notify you. The notice should entail information on the accusations you face. It should also list your due process rights and a request to file a written response to the filed complaint. The board also can make several requests for materials and information.

Although every case is unique, speak to an attorney before engaging board investigators. Responding to their questions and providing documents could jeopardize your license even further. The bottom line is: do not agree to anything without first talking to your lawyer.

As a CPA or accounting firm, know you have constitutional and statutory rights. Also, understand you often have burdensome responsibilities. Immediately seeking counsel from an experienced lawyer is useful in defending your license.

When the investigation ends, the board might take any of these actions based on the findings:

  • close the case.
  • Issue a fine or citation.
  • Transfer the matter to the attorney general to pursue formal discipline.

The attorney general might then file a formal accusation against you if you are a licensee. If you are an applicant, they will file a statement of issues. Both of these filings trigger an official administrative hearing process. The hearing process occurs per the California Administrative Procedures Act.

The board will then serve you the accusation or statement of issues. At the same time, the board will serve you a Notice of Defense. If you wish to challenge the allegations in the accusation, you must file your response. This involves sending the Notice of Defense back to the board within 15 days. If you do not file the Notice of Defense within 15 days, the board will suspend your license by default.

If you respond to the Notice of Defense, the board schedules a hearing. This hearing occurs at the Office of Administrative Hearing, and an administrative law judge usually presides over it.

You have the right to a lawyer during the hearing, although the board will not appoint one for you. That means you must hire a lawyer to represent you during the entire case, and you should. The judge will also allow you to:

  • Subpoena witnesses.
  • Enter evidence.
  • Cross-examine board witnesses.
  • Make opening and closing statements.

Your lawyer can do all this for you.

When the hearing is over, the judge will render a decision. The judge will recommend the necessary penalties if you have lost at the hearing. The CBA has the discretion to adopt, change, or reject the judge's recommendations.

Disciplinary actions the board can impose after the formal administrative proceedings might include:

  • Expensive administrative penalties.
  • Public reproval.
  • Multilayer probation accompanied by complex terms.
  • The board’s cost recovery.
  • License revocation.
  • License suspension.

You can file a reconsideration petition if you are not content with the outcome of the hearing. The petition appeals the judge’s decision. The board can reconsider your case on its own, or it might appoint a different judge to hear it.

Common Violations Alleged Against CPAs

CPAs play a crucial role in delivering financial services. They counsel people on their tax requirements or family and personal needs. They also counsel large and small businesses and federal and state budgeting. When a person complains about these services, the CPA's reputation and future are on the line. The most prevalent violations alleged against certified public accountants and accounting firms include:

  • Administrative action by another government agency, like the FTB (Franchise Tax Board). Other agencies include the IRS and the SEC (Securities and Exchange Commission). The PCAOB (Public Company Accounting Oversight Board) is also included.
  • Misrepresentation, deceit, theft, fraud, and dishonest acts in practicing public accounting.
  • Incompetence and negligence.
  • Failure to deliver services per the accounting professional standards.
  • Unlicensed practice and failure to adhere to license renewal conditions.
  • Breaching client confidentiality rules.
  • Breach of fiduciary duty.
  • Falsifying continuing education reports or failing to complete the necessary continuing education hours.
  • Discrimination.
  • False advertising.
  • Accepting or paying referral fees.
  • Unprofessional conduct.
  • Preparing misleading or false financial information, reports, or statements.
  • Practicing while addicted to alcohol or drugs.
  • Failing to protect and preserve client files.
  • Failing to follow GAAP (Generally Accepted Accounting Procedures).
  • Public displaying of an expired, revoked, or suspended license.

If you face criminal charges, understand their repercussions on your professional license. A no-contest plea, guilty plea, or conviction can impact your license. A criminal conviction related to the duties of a CPA can result in the suspension of your license. That is true even if you committed that crime when not on the job. Examples of this crime include DUI and drug-related charges. Even a crime unrelated to accounting might still affect your license if convicted.

Contact a Competent CPA License Defense Attorney Near Me

At Santa Cruz License Attorney, our skilled lawyers will work with you hand in hand. We will strive to close a CBA investigation against you without disciplinary action. If that is impossible, we will work to reduce the disciplinary action the board may impose. We can often negotiate for a fair resolution so you can avoid an administrative hearing. If that is impossible, we will defend you at the hearing.

We will fight for you if you face false accusations of unprofessional conduct. We will provide you with the expertise and experience to prove your innocence before the CBA. Our lawyers will defend you even if you have committed an unintentional mistake. First, we will listen to your side of the story and offer legal counsel. Then, we will build a defense strategy to realize the most favorable outcome. Call us at 831-732-4390 for a consultation.