As a certified public accountant (CPA), your professional license is everything. That paper is essential for several reasons. It lets your customers know you are trained and communicates to the community that you are trustworthy. Fundamentally, however, the license is your authority to practice as a certified public accountant in California. Therefore, it is a great deal whenever the license faces disciplinary action, and you should take the matter seriously. 

First, you must understand the accusations against you and the process of defending yourself. For this, you will require legal assistance. At Fresno License Attorney, we assist working professionals, including certified public accountants, in addressing the threats their licenses face. We understand the law and how the state licensing system functions. Most importantly, we believe you deserve another chance to practice your profession, and we are ready to use our skills and resources to safeguard your livelihood.

If you are a certified public accountant (CPA) or a member of a licensed accounting firm subject to a CBA disciplinary action or even an investigation, do not hesitate to call us for a consultation and case evaluation.

The Mission of the California Board of Accountancy

The California Board of Accountancy (CBA) monitors all the accounting services that CPAs provide for professional and ethical violations. Its mission is to safeguard consumers by ensuring that only eligible licensees practice public accounting according to the established professional standards. Consequently, the CBA is not on your side when faced with disciplinary action. Undoubtedly, the CBA offers many excellent services to CPAs in California and advocates for appropriate legislation and rules. However, if you are under investigation, the board is your adversary.

The board receives complaints regarding licensees from professional societies, police agencies, consumers, and other government agencies. Additionally, the board receives information about misconduct through regular licensee audits and compulsory self-reporting.

After scrutinizing these complaints, the board may take disciplinary action against the licensee for violating applicable regulations or statutes by suspending or revoking the license, imposing restrictions or probation on the licensee, or denying an applicant a license.

Types of Accusations Against CPAs

As mentioned, CPAs in California are regulated by the California Board of Accountancy. The board acts according to state laws, including the California Accountancy Act (CAA) and CBA rules and regulations.

The rules CPAs in California must abide by are many and include everything from the number of continuing education hours they require to renew their license (eighty every 24 months) to how the peer review system should work.

Consequently, it is impossible to tell all the possible risks a CPA’s license faces. However, what is clear is the type of accusations for which a CPA, a licensed accounting company member, or an accounting firm itself can be disciplined.

The most prevalent accusations made against accounting firms and certified public accountants include the following:

  • Incompetence and negligence in the performance of accounting services.

  • Misrepresentation, deceit, and fraud in the public accounting practice.

  • Administrative actions from other government agencies, for example, the Public Company Accounting Oversight Board, the Securities and Exchange Commission, the California Franchise Tax Board, and the Internal Revenue Service.

  • Criminal convictions: convictions that can subject a CPA to disciplinary action include those of DUI, simple drug possession, drug possession intending to sell, tax evasion, all fraud offenses, sexual assault, and domestic violence.

  • Failing to deliver services per professional standards.

  • Administrative violations associated with unlicensed practice and failure to adhere to license renewal or application requirements.

The CBA Disciplinary Process

The CBA disciplinary process is quite involved, which is why you want to have the representation of an experienced lawyer. Various stages are involved, as follows:

Complaint Filing

Generally, the disciplinary process begins when the California Board of Accountancy receives a complaint against a CPA or accounting firm from a professional society, consumer, police agency, or any other government agency.

Once the board receives a complaint against you, it may initiate an investigation. Of course, the board does not act on all complaints— a complaint ought to be both actionable and credible to be acted upon. For example, the board is not likely to act on a simple fee-related dispute or probe a CPA because a consumer felt they were too offhand. In fact, during complaint filing, there are chances for your lawyer to intervene sooner in the case and solve misunderstandings and disputes before they turn to an advanced investigation.

Investigations

The investigation process will begin if the board finds the complaint worth investigating. The board's enforcement unit employs non-technical officers (enforcement analysts) and technical officers (investigative ICPAs or CPAs) to do a significant part of its investigation. Occasionally, the board will involve external experts.

For some cases, particularly those associated with practicing without a license, the board will involve the Department of Consumer Affairs Division of Investigation to help with the investigation. Sometimes, the investigation might also entail a physical appearance at informal proceedings before the board's enforcement advisory committee.

Note that the board must notify you whenever you are under investigation. The notice must include information regarding the accusations against you, a request to respond to the allegations in the complaint in writing and your due process rights. Additionally, the board has complete discretion to request materials and information. It can request that you appear at an investigative proceeding to give your opinion on the matter and answer the questions that board members might have.

Furthermore, the CBA has the discretion to pursue all investigation avenues. It could subpoena eyewitnesses and speak to your supervisors, colleagues, and clients. However, remember that you have due process rights, including the legal right to be presumed innocent until proven guilty. Therefore, the board has no right to find you liable unless it presents clear, convincing evidence to show guilt.

During an investigation, California statutes do not particularly grant you the right to legal counsel. Nevertheless, you want to hire a lawyer to represent you. They may go with you to all the investigative hearings or meetings, but other than that, they can:

  • Collect and present evidence to support your case.

  • Assist you in formulating responses to questions.

  • Prepare a response or respond to the accusations on your behalf.

  • Negotiate with the involved parties for you.

  • Collaborate with you to mount a compelling defense strategy.

Especially during this early investigative stage, the lawyer can ensure that the board respects your legal rights and grants you an impartial hearing. Remember, the law requires your cooperation with investigators. Failing to do that is a violation on its own. However, ensure that you do not do anything in the process of cooperating that may hurt your case.

Investigation Results

Per the License Enforcement Handbook, the investigation timelines vary widely based on the precise misconduct. Eventually, however, the CBA may decide the following after the investigation:

  • Close the case—the CBA can merely close your case, either since it lacks sufficient evidence to support the accusations or does not have jurisdiction over the specific complaint.

  • Impose a citation—the CBA can impose a citation against you. Citations are usually not classified as a formal penalty. However, they might involve fines and other corrective disciplinary actions. Failing to comply with the citation terms can lead to more severe disciplinary action.

  • Seek formal discipline—Lastly, if investigations establish that you might have breached some aspects of the CBA regulations, Accountancy Act, or both, the board will escalate the situation to the Office of the Attorney General for formal proceedings and disciplinary action.

If the board decides to send your case to the attorney general's office, the formal disciplinary process will kick off. The process has various stages.

Firstly, the Office of the Attorney General might file a statement of issues if you are an applicant or an accusation if you are a licensee. The accusation or statement of issues will then be officially served to you at home. Simultaneously, you will be served with a Notice of Defense. The filing and serving of the accusation or statement of issues initiates an administrative hearing process per the California Administrative Procedures Act. If you wish to challenge the allegations you face, you must respond to the Notice of Defense and file the response with the board within 15 days.

During formal disciplinary proceedings, you have the right to legal counsel and representation, although the board will not appoint you a lawyer. That means you can hire your lawyer to present your case for you.

You can opt not to file a response to the Notice of Defense. In that case, the board will issue a default ruling. You can also try negotiating a stipulated deal and reaching a settlement with more lenient disciplinary action to which the parties involved agree. Additionally, you can demand a formal proceeding to submit your defense.

CBA proceedings are held through the state's OAH (Office of Administrative Hearings). Generally, these proceedings work similarly to civil court trials and occur before an ALJ (Administrative Law Judge). You are entitled to make closing and opening statements, enter evidence, subpoena eyewitnesses, and cross-examine the board's witnesses. Your lawyer can do all this for you.

After the hearing, the Administrative Law Judge must render a verdict on the matter and recommend the penalties to be imposed. The board can then choose to adopt the judge’s decision and impose the recommended penalties or lower the penalty.

Before the board imposes disciplinary action, it must refer to its long list of disciplinary guidelines. These guidelines provide the types of disciplinary action the board can impose and the factors it must consider before the imposition. These factors include, among others:

  • The extent and nature of potential and actual consumer harm.

  • The extent and nature of potential and actual harm to clients.

  • The nature and severity of the violation.

  • Your role in the violation.

  • Your history of violations.

  • Your attitude toward your commission of the violation.

  • Mitigating and aggravating factors.

  • Your ability to pay administrative penalties.

The penalties the board may impose after the administrative proceedings include the following:

  • Expensive administrative penalties. For example, a first violation carries a maximum fine of 5,000 U.S. dollars, while a second violation fine can reach ten thousand U.S. dollars. Additionally, if it is found that you violated particular CAA provisions, your fine can go up to fifty thousand U.S. dollars for your first violation. Companies may be subject to a maximum fine of one million U.S. dollars.

  • A public reprimand.

  • A cease and desist letter.

  • Probation, accompanied by complex terms.

  • CBA cost recovery.

  • License revocation.

  • License suspension.

If you disagree with the administrative law judge's decision, the law gives you the right to bring a petition for reconsideration, essentially appealing that decision. The board may reconsider the matter itself or assign it to another ALJ.

How a License Defense Attorney Can Help

An experienced lawyer will work with you closely to close the investigation against you without disciplinary action or lessen the disciplinary action that the CBA may ultimately impose. For the most part, a lawyer can assist you in negotiating a favorable settlement with the CBA’s counsel without an administrative hearing. The lawyer can also zealously represent you in a contested proceeding.

If you have been subject to criminal prosecution, you want to understand how a nolo contendere plea, guilty plea, or conviction may affect your professional license. A criminal conviction from an activity outside your professional duties that does not correlate with your practice might still significantly impact your CPA license.

Whether someone has wrongfully accused you of unprofessional conduct or has committed an uncharacteristic error, your lawyer can offer the expertise, resources, and experience to zealously defend you in front of the board. They will listen to you, offer legal counsel, and mount a defense strategy to achieve the best possible outcome.

Contact An Experienced Professional License Attorney Near Me

Navigating the CBA system can be challenging. Just renewing your license can feel stressful. Defending yourself against an accusation can be entirely overwhelming. However, the most essential thing you must know is that you do not have to navigate the disciplinary process alone. At Fresno License Attorney, we can help you.

We are devoted to ensuring our clients understand the process, their rights, legal options, and the necessary steps to protect their interests. We have several years of experience fighting for professionals and protecting them against accusations of unprofessional conduct. We can do the same for you. For a consultation or to learn more regarding your legal rights when defending your accounting license, call us at 559-777-7040.