Earning a public accountant certificate takes a lot of dedication, hard work, and several years of education and training. Once you meet all the criteria the licensing board requires to earn a license to work as a certified public accountant (CPA), you should be happy because this paper can become your livelihood.

A CPA license also tells your potential customers that you are well-trained and trustworthy enough to handle their financial problems professionally. Unfortunately, everything you have worked for could suddenly vanish into thin air due to complaints from professional societies, consumers, government agencies, and law enforcement agencies.

If you are a CPA license holder facing complaints or a criminal charge that could put you at risk of losing it or facing other harsh disciplinary actions by your licensing board, retaining the professional services of an attorney is a wise idea. Quick intervention by a qualified defense attorney can increase your chances of winning the allegations you are up against or securing a lighter disciplinary action.

Crucial Roles of CPAs

Financial records are vital for every business or company, regardless of size. For that reason, most employers understand the importance of working with financial experts to help manage their taxes, debts, budgets, and other crucial financial issues.

That is where the services of a CPA become crucial. A CPA can help businesses of different sizes stay aware of their current financial situation, be legally compliant, and be better positioned to make great decisions that can help boost their client or customer base and revenue.

Unfortunately, losing your hard-earned CPA license is much easier than securing one, even though you had to undergo several years of training and education to secure the license. It is not uncommon for many accountants to find themselves in trouble with the law and the licensing board due to allegations involving financial crimes like embezzlement, money laundering, and fraud.

Since many companies and businesses rely on you as a CPA to manage their finances, it is easy for someone to point the finger at you whenever there is a financial-related problem within the company. In other situations, a minor mistake in your line of duty could put your hard-earned CPA license at risk of revocation or suspension, even though you had no malicious intent.

Other times, you could find yourself fighting hard to keep your license when an angry employer accuses you of incompetence or carelessness when his/her company goes bankrupt due to his/her own mistakes.

Retaining the services of a reliable and seasoned attorney who understands CPAs' crucial roles is key when you find yourself in this situation. A reliable attorney can help prove you are a victim of false allegations or prepare defenses that can help secure the best attainable outcome in your unique case.

The California Board of Accountancy's (CBA) Mission

The regulatory agency with the legal responsibility to oversee the licensing, professional conduct, and possible disciplinary actions a CPA should receive for a violation is the CBA. The CBA issues only four types of licenses, including:

  • Certified Public Accountant
  • Accounting partnerships
  • Accounting cooperation
  • Accounting firm

The first type of license is issued to individuals who have passed all the requirements and stringent tests necessary to gain a public account certificate, and the last three are for multiple accountants or businesses.

Unlike what many CPAs assume, the licensing board's primary mission is to protect consumers and the general public against possible financial harm and ensure that this industry runs with the highest professionalism and standards.

To achieve this crucial mission and the guiding rules, the CBA issues accounting licenses only to individuals and firms that they have determined are trustworthy, qualified, and more likely to serve the public's best interests.

What to Expect When the CBA Receives a Complaint Against You

As mentioned in the previous paragraph, the CBA could receive a complaint against you from several sources, including consumers and law enforcement agencies. When the board receives a complaint against you, it will examine it to determine if it is substantiated. If the board finds the allegations you are up against "unsubstantiated," it will drop the case.

However, when the board finds the complaints substantiated, it will send you a Notice of Investigation listing the allegations you are up against and your rights during the investigation. It could take about five (5) months from the date CBA received a complaint against you to receive a judgment or final decision on your case.

You should immediately hire legal counsel as soon as you receive the investigation notice or have a good reason to believe that one of your customers has filed a complaint against you. A reliable attorney can negotiate with the board to dismiss your case or offer an alternative settlement, allowing you to keep your CPA license.

However, when the board finds the complaints against you substantiated, it will file a formal accusation against you, publicly visible on the CBA's website. At this juncture, you will rely on your attorney to prepare defenses to help challenge the allegations against you.

A well-planned defense can help you gain a stay of revocation or any other lighter disciplinary action that allows you to keep your license and move on with your business.

Instances of Misconduct or Violations that Can Attract CBA's Disciplinary Actions

While every case is different, several criminal violations and instances of professional misconduct could make CBA take disciplinary action against you, including (but not limited to) the following:

  • Financial or white-collar crimes like money laundering, bribery, fraud, and embezzlement
  • Failure to follow the required professional standards
  • Criminal convictions
  • Gross negligence, ordinary negligence, and incompetence
  • Breach of fiduciary or financial duty
  • Abetting or aiding a crime
  • Unprofessional conduct
  • Practicing without securing a license

It is worth noting that the CBA could also work with the AG (Attorney General) and the DOJ (Department of Justice) to initiate criminal charges against you if the allegations you are up against are crime-related. That could happen if the allegations you are up against involve white-collar crimes or tax evasion.

If you are under arrest or charged with a criminal offense, you will face legal penalties for this offense upon conviction and the CBA's disciplinary actions.

Additionally, if your violation or misconduct involves negligence or gross negligence, the CBA could file a civil lawsuit against you. That means the court could order you to pay damages for your misconduct when they win the lawsuit.

Therefore, you should treat the CBA's Notice of Investigation seriously because even a minor complaint could jeopardize your CPA license status. Although the CBA will consider some complaints "unsubstantiated" and dismiss them, do not undermine any complaint or charge filed against you because you do not know the cause of action the board could take.

If the board files a formal accusation against you, they will post it to allow the public, including your current and potential employers, to see it. Therefore, you should act immediately after receiving the CBA's Notice of Suspension. The sooner you contact an attorney, the higher your chances of winning the allegations you are up against.

Potential Disciplinary Actions a CPA Should Expect at the End of Administrative Hearing

As mentioned above, the CBA determines the disciplinary actions a CPA should receive for any charges or complaints filed against him/her. The CBA has several disciplinary actions they can impose on you if there is sufficient evidence to prove to the administrative law judge (ADL) that the allegations you are up against are substantiated or true, including:

  • License revocation
  • License suspension
  • CBA cost recovery
  • Public reproval
  • Allow a stay of revocation and award you a license probation
  • Administrative fine and citation

Even the least serious disciplinary action, like public reproval, can significantly affect your reputation and business because even people who did not know about the charges or complaint will know you received disciplinary action.

Aggravating and Mitigating Factors that Could Influence the Seriousness of the CBA's Disciplinary Actions

During the administrative hearing, the ADJ will hear aggravating circumstances from the board-appointed counselors (prosecution team) and mitigating factors from your attorney to determine your appropriate disciplinary action. Listed below are aggravating and mitigating factors the presiding ADJ will consider during this formal hearing:

Aggravating Factors

While the above are the standard disciplinary actions you could receive at the end of the administrative hearing, some aggravating factors could make them more serious, including:

  • You failed to cooperate with the board's investigation process
  • A valid client incurred a financial loss
  • You secured a significant financial gain from the misconduct or violation
  • You are on probation for a professional misconduct or criminal violation
  • The professional misconduct or violation was premeditated and willful
  • You misappropriated funds or were criminally negligent
  • The violation or misconduct involved a breach of your "fiduciary duties."
  • You were aware the other person would incur a financial loss, mainly because he/she is a member of the "vulnerable" class of people
  • The financial loss incurred is high
  • Your previous record of professional misconduct issues or criminal convictions

Mitigating Factors

If your attorney can present the following mitigating factors at the administrative hearing for your case, you could receive a lighter or more serious disciplinary action:

  • No member of the public (client or consumer) incurred a financial loss
  • The breach of your fiduciary or financial duty was non-serious
  • The alleged misconduct or violation occurred a long time ago
  • You cooperated with the CBA's investigators throughout the entire investigation
  • The financial loss incurred is non-serious or reversible
  • There is evidence to prove you are now a rehabilitated and law-abiding citizen
  • You are remorseful for your misconduct issues
  • Your mistake was an "honest" one resulting from a provocation, meaning it was unintentional
  • You did not receive any financial gain or benefit from the misconduct or violation
  • You did take the initiative to restitute or compensate the involved victims

A skilled and aggressive attorney will offer you legal representation through every stage of the CPA disciplinary process, from the investigation to the administrative hearing, to increase your odds of securing a favorable outcome.

Even when the board decides to revoke your CPA license, your attorney can help you prepare and file a reinstatement application to protect your career and livelihood.

Frequently Asked Questions About CPAs Misconduct Issues and CBA's Disciplinary Actions

Below are some common questions many people ask about the CBA disciplinary process and common misconduct issues committed by CPAs:

     1. How Can a Criminal Charge Affect My CPA License?

If you are charged or guilty of a criminal offense, the CBA will impose additional disciplinary actions on top of the court-ordered criminal sentence. That is particularly true if the criminal offense is closely related to your practice as a CPA. Examples of such crimes include (but are not limited to) the following:

  • Driving under the influence (DUI)
  • Sexual assault or domestic violence
  • Tax evasion
  • All fraud-related crimes
  • Possession of an illegal or controlled substance with the criminal intent to distribute or sell
  • Simple possession of a controlled substance

     2. Do I Need a Defense Attorney for an Investigation or Complaint Against My CPA License?

Generally speaking, everything is at stake if you have received the CBA's investigation notice, including your career and livelihood. Losing your CPA license could sometimes mean finding an alternative job or career to earn income and live a comfortable life because the CBA could deny your reinstatement application.

However, with the help of a professional defense attorney, you could avoid this or qualify for a lighter disciplinary action that allows you to keep your license and protect your career.

Find a Riverside License Attorney Near Me

Allegations of professional misconduct do not have to result in a suspension or revocation of your professional license. Our reliable attorneys at Riverside License Attorney can intervene and prepare legal defenses to help you secure the best attainable outcome.

We invite you to call us at 951-404-0569 if you or a loved one is at risk of facing the CBA's disciplinary actions due to an alleged professional misconduct issue or criminal charge.