Disciplinary Actions 2016

Written on Feb 08, 2018

According to the OSCPA bylaws, in the case of a suspension or expulsion of a Member or Affiliate, a statement of the case and notice of the final action taken shall be published to all Members.

Frank A. D’Andrea of Cincinnati, OH
As a result of an investigation of alleged violations of the Code of Professional Conduct of the Ohio Society of CPAs and the AICPA, Mr. D’Andrea entered into a settlement agreement under the Joint Ethics Enforcement Program, effective June 6, 2016.

Information came to the attention of the Ethics Charging Authority (“ECA”) (the Ohio Society of CPAs and the AICPA Professional Ethics Executive Committee) alleging a potential disciplinary matter with respect to Mr. D’Andrea’s misrepresentation of the number of CPE hours obtained and reported to the Accountancy Board of Ohio.

After an investigation, Mr. D’Andrea was charged with violating the following rule of the Ohio Society of CPAs and the AICPA’s Codes of Professional Conduct:

Rule 1.400.001 (501–Acts Discreditable, prior to December 15, 2014), misrepresenting the number of CPE hours obtained.

Agreement:

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

a. To waive his right to a hearing under OSCPA bylaws article VII, section B and AICPA bylaws section 7.4.
b. To neither admit nor deny the above specified charges
c. To admonishment
d. To submit evidence of satisfactory completion of the 3-hour Professional Standards and Responsibilities – Ethical Shifts: Interpretations and Actions course within six months of the effective date of this agreement.
e. That the ECA shall publish his name, the charges, and the terms of this settlement agreement.
f. 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.

Gary B. Wachs of Cleveland, OH
As a result of an investigation of alleged violations of the Code of Professional Conduct of the Ohio Society of CPAs, Mr. Wachs entered into a settlement agreement under the Joint Ethics Enforcement Program, effective February 16, 2016.

Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of The Ohio Society of CPAs Professional Ethics Committee), alleging a potential disciplinary matter with respect to Mr. Wachs’ misrepresentation of the number of CPE hours obtained and reported to the Accountancy Board of Ohio.

After an investigation, Mr. Wachs was charged with a violation of The Ohio Society of CPA’s Code of Professional Conduct as follows:

Rule 1.400.001 (501 – Acts Discreditable, prior to December 15, 2014)

Agreement:

In consideration of the ECA forgoing further investigation of Mr. Wachs’ conduct as described above and in consideration of the ECA forgoing any further proceedings in this matter, Mr. Wachs agrees as follows:

a. To waive his rights to a hearing under Article VII Section B of the OSCPA bylaws.
b. To neither admit nor deny the above specified charges.
c. To be admonishment
d. To successfully complete the three-hour ethics course: Professional Ethics: Professional Standards and Responsibilities – Ethical Shifts: interpretation and Actions within six months of the effective date of the agreement.
e. That the ECA shall publish his name, the charges, and the terms of the settlement agreement.
f. That the ECA will monitor compliance with the terms of this settlement agreement and initiate an investigation where the ECA finds that there has been noncompliance.

Larry Couchot of Dayton, OH
Under the automatic disciplinary provisions of the OSCPA bylaws, Mr. Couchot’s membership was terminated effective November 9, 2015, following revocation of his CPA certificate by the Accountancy Board of Ohio for violating state board statue 4701.16(A)(5) - Conviction of a felony under the laws of any state or of the United States

Paul A. Williams / Williams & Williams CPAs Inc. of Youngstown, OH
Under the automatic disciplinary provisions of the OSCPA bylaws, Mr. Williams’ membership was terminated effective June 9, 2016, following revocation of his CPA certificate and firm registration by the Accountancy Board of Ohio for violating state board statues 4701.16(A)(11) - Failure to comply with firm registration requirements.

Peter A. Beck of Mason, OH
Under the automatic disciplinary provisions of the OSCPA bylaws, Mr. Beck’s membership was terminated effective November 9, 2015, following revocation of his CPA certificate by the Accountancy Board of Ohio for violating state board statues 4701.16(A)(5) – Conviction of a felony under the laws of any state or of the United States.

Stephen D. Burcham of Huntington, WV
As a result of an investigation of alleged violations of the Codes of Professional Conduct of the AICPA and the Ohio Society of CPAs, Mr. Burcham, with the firm Stephen D. Burcham, CPA, entered into a settlement agreement under the Joint Ethics Enforcement Program, effective May 1, 2015.

Information came to the attention of the Ethics Charging Authority (“ECA”) (comprised of the AICPA Professional Ethics Executive Committee and the Ohio Society of CPAs Professional Ethics Committee) alleging potential disciplinary matters with respect to Mr. Burcham’s performance of professional services on the audits of the financial statements of two employee benefit plans for the year ended December 31, 2009.

The ECA reviewed the auditor’s report, financial statements and working papers for the years ended December 31, 2009, and certain other relevant documents. Based on this information, there appears to be prima facie evidence of violations of the rules of the AICPA and the Ohio Society of CPAs’ codes of professional conduct as follows:

Violations for Pension Plan

Rule 202 – Compliance with Standards

The auditor failed to obtain sufficient appropriate audit evidence to support the opinion on the financial statements in the areas of planning, internal controls, investments, contributions received and related receivables, benefit payments, participant data, plan obligations, plan tax status, commitments and contingencies, administrative expenses, and subsequent events. (SAS 106; AU §326)

Rule 203 – Accounting Principles

The financial statements failed to disclose the following:

a. Subsequent events required by ASC 855-10-50.
b. Fair value measurement disclosures required by ASC 820 for assets and liabilities measured at fair value on a recurring basis. Violations for Profit Sharing Annuity Plan Rule 202 – Compliance with Standards. The auditor failed to obtain sufficient appropriate audit evidence to support the opinion on the financial statements in the areas of planning and supervision, investments, benefit payments, participant data, plan representations. (SAS 106; AU §326)

Rule 203 – Accounting Principles

The financial statements failed to disclose the following:

a. Subsequent events required by ASC 855-10-50.
b. Fair value measurement disclosures required by ASC 820 for assets and liabilities measured at fair value on a recurring basis.

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

The Schedule of Assets Held at End of Year did not identify parties-in-interest and a general description of terms and interest rates of participant loans as required by DOL 29 CFR 2520.103-10.

Violations for Both Plans

Rule 201 – General Standards A. Professional Competence

The auditor undertook an engagement that he could not reasonably expect to complete competently.

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

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

Agreement:

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

a. To waive his rights to further investigation of this matter in accordance with the Joint Ethics Enforcement Program (JEEP) Manual of Procedures.
b. To waive his rights to a hearing under AICPA bylaws section 7.4. and the Ohio Society of CPAs bylaw Article VII Section C.
c. To neither admit nor deny the above specified charges.
d. To be suspended from membership in the AICPA and the Ohio Society of CPAs for a period of two years from the effective date of this agreement.
e. To comply immediately with professional standards applicable to the professional services he performs and to submit evidence of such compliance.
f. To complete the following 11 hour continuing professional education (CPE) course within three months of the date he signs this agreement and provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).

Upcoming Peer Review: Is Your Firm Ready? 11 hours

g. To provide an attestation immediately, then every six months for a period of three years that he is not performing audits or reviews. If he returns to performing such work, he agrees:
i. To complete the following 37.5 hours of continuing professional education (CPE) courses prior to returning to performing audits or reviews and provide evidence of such completion (e.g., attendance sheets, course completion certificates, etc.).

Auditing Employee Benefit Plans 12.0 hours*

Audit Workpapers: Documenting and Reviewing Field Work 6.5 hours

Annual Accounting and Auditing Workshop 19.0 hours

Total 37.5 hours

*Required if he returns to performing audits of employee benefit plans.

ii. 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 audits and reviews 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 after returning to performing audits or reviews.

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 report should provide the reviewer’s comments in detail for each engagement and should include a description of the nature of the entity reviewed, the entity’s year end and the date of the review. The first report is due 120 days after the reviewer has been approved by the ECA with subsequent reports due every 90 days.

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 or changes in his role as an engagement partner during the period he is subject to the pre-issuance reviews. If his practice changes and he is no longer involved with audits and reviews or no longer acts in a supervisory capacity on such engagements, 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 and undergo the pre-issuance reviews.

iii. To comply with directive e 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 completion of the pre-issuance reviews. The following information should be included regarding the engagements listed: number of hours spent on the engagement, his role and total hours on each engagement, level of professional services rendered, type of report issued, type of organization, and whether it was an initial engagement. 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 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 or changes in his role until a suitable work product is selected for review. If his practice changes and he is no longer involved with audit, review, compilation with note disclosures or no longer acts in a supervisory capacity on such engagements, 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 trial board for a hearing or take such other action as it deems appropriate.

iv. To submit within 30-days after he has commenced performing audits of employee benefit plans evidence that his firm has submitted an application to join the Employee Benefit Plan Audit Quality Center. Upon membership in that Center, he agrees that his firm will comply with the directives of that Center.

v. To submit within 60-days after he has commenced performing audits or reviews evidence that his firm has enrolled in the peer review program.

h. To be prohibited from serving as a member of any ethics or peer review committee of the AICPA or the Ohio Society of CPAs until he has completed all directives in this letter. This restriction will be communicated to those responsible for appointments to such committees. In addition, if he applies to join any committee of the AICPA or the Ohio Society of CPAs, he must inform those responsible for such appointments of the results of this ethics investigation. This requirement shall remain in effect until the ECA determines that the work product submitted to comply with directive g. iii. above, if applicable, substantially complies with professional standards.
i. To be prohibited from teaching continuing professional education courses approved by the AICPA or the state CPA societies in the areas of audit and accounting and employee benefit plans until he has completed all of the directives included in this letter. This restriction will be communicated to those responsible for engaging CPE instructors at the AICPA and the Ohio Society of CPAs. This requirement shall remain in effect until the ECA determines that the work product submitted to comply with directive g. iii. above, if applicable, substantially complies with professional standards.
j. To be prohibited from performing peer reviews in any capacity until the directives in this letter have been completed. This prohibition will remain in effect until the ECA determines that the work product he submitted to comply with directive g. iii. above, if applicable, substantially complies with professional standards. This restriction will be communicated to his peer review oversight agency.
k. 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.
l. That the ECA shall publish his name, the name of his firm, the charges, and the terms of this settlement agreement.
m. 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.

Thomas A. Kusak / Flask, Kusak & Company of Seven Hills, OH
Under the automatic disciplinary provisions of the OSCPA bylaws, Mr. Kusak’s membership was terminated effective June 9, 2016, following revocation of his CPA certificate and firm registration by the Accountancy Board of Ohio for violating state board statues 4701.16(A)(11) - Failure

Leave a comment