Certified Public Accountants (CPAs) must obtain licenses through the Texas State Board of Public Accountancy (TSBPA). As a result, TSBPA also investigates misconduct allegations by CPAs and takes necessary enforcement action. Findings of misconduct can lead to a loss of licensure and other severe consequences. Therefore, having a CPA license defense attorney on your side can make a significant difference in the outcome of your case.
Grounds for Disciplinary Action by TSBPA
Tex. Occ. Code §901.502 may discipline license or certificate holders for various reasons, including the following:
- fraud or deceit in obtaining a certificate, firm license, or license;
- fraud, dishonesty, or gross negligence in the performance of services as a license holder, including:
- knowingly participating in the preparation of a false or misleading financial statement or tax return; or
- failing to file the license holder’s income tax return;
- the failure of a person who is certified or required to hold a firm license to obtain a license not later than the third anniversary of the date on which the person was certified or required to obtain a firm license;
- the failure of a licensed person to renew the license not later than the third anniversary of the date on which the person most recently obtained or renewed the license;
- a violation of the standards of practice of public accounting adopted under Texas law;
- a violation of a rule of professional conduct adopted by TSBPA;
- revocation or suspension of the certificate or firm license or revocation, suspension, or refusal to renew the license of the person’s partner, member, or shareholder;
- revocation, cancellation, placement on probation, limitation on the scope of practice, or suspension by another state, or a refusal of renewal by another state, of the authority issued by that state to the person, or to the person’s partner, member, or shareholder, to engage in the practice of public accountancy for a reason other than the failure to pay the appropriate authorization fee;
- revocation or suspension of, or a voluntary consent decree concerning, the right of the person, or the person’s partner, member, or shareholder, to practice before a state or federal agency for a reason TSBPA determines warrants its action;
- final conviction of or the imposition of deferred adjudication for an offense under the laws of any state or the United States that:
- is a felony; or
- includes fraud or dishonesty as an element of the offense;
- conduct indicating a lack of fitness to serve the public as a CPA; or
- a violation by a license holder or an owner of a CPA firm who is not a license holder under:
- the Texas Public Accountancy Act;
- professional standards adopted by TSBPA; or
- a rule or order adopted by TSBPA.
Investigations of Complaints by TSBPA
TSBPA must screen all complaints received within 30 days and may take steps to obtain additional information if needed. 22 Tex. Admin. Code §519.20 gives TSBPA the discretion whether to open an investigative file concerning a complaint. TSBPA only may continue with an investigation if it has jurisdiction over the individual as a licensed CPA, as well as jurisdiction over the subject matter or an alleged violation of the TSBPA Rules, the laws that govern CPAs, or an existing Board order.
If TSBPA opens an investigation, it will notify the licensee of the complaint and investigation. The licensee must cooperate with TSBPA to furnish any requested information related to its investigation and provide a detailed response to each allegation within 30 days of the date of the notice of the investigation.
TSBPA or its designated committee may invite the licensee and complainant to a voluntary informal conference to aid the investigation. Licensees may appear at the informal conference with counsel, but they must agree to respond to any questions personally. Each party can make a brief presentation to TSBPA, as can third parties invited to do so. TSBPA also can ask questions of the licensee and complainant concerning the complaint.
Disposition of Complaints by TSBPA
Following its investigation, a committee will make recommendations to TSBPA concerning the disposition of the complaint. Possible dispositions under 22 Tex. Admin. Code §519.24 may include:
- Dismissal with a confidential letter of comment and suggestions;
- Recommendation of disciplinary action;
If the committee finds that the licensee has violated a rule or law and recommends disciplinary action, it may offer the licensee an agreed consent order that contains findings of fact and conclusions of law, as well as proposed sanctions, administrative penalties, and costs. The licensee has 20 days to accept or reject the agreed consent order. If the licensee rejects the agreed consent order, they must request a contested hearing to dispute the committee’s findings. Failure to respond to the agreed consent order, request a hearing, or otherwise appear at a hearing, will result in the committee offering a proposed order for TSBPA approval.
If the complaint proceeds to a contested hearing, 22 Tex. Admin. Code §510.40 provides that either the executive director of TSBPA or an administrative law judge (ALJ) appointed by the State Office of Administrative Hearings (SOAH) may preside over the hearing. While an ALJ appointed by SOAH will issue a proposal for decision (PFD) following a contested hearing, TSBPA retains the ultimate authority to determine sanctions and make final decisions regarding any disciplinary action in contested cases.
Once TSBPA issues a final decision on disciplinary action, the licensee may file a motion for rehearing under 22 Tex. Admin. Code §519.90. Licensees who disagree with a final disciplinary order of the TSBPA also may seek judicial review of the order.
Potential Sanctions for Disciplinary Action by TSBPA
22 Tex. Admin. Code §519.41 outlines the authority of TSBPA to impose sanctions against CPA in disciplinary actions. Potential sanctions may include:
- revocation of a certificate, firm license, or practice;
- suspension of a certificate, firm license, practice privilege, or license for a period not to exceed five years;
- placement of a licensee or certificate holder on probation;
- issuance of a reprimand to a licensee or certificate holder;
- placement of limitations on the scope of a licensee or certificate holder’s practice;
- requiring a licensee or certificate holder to complete a peer review program conducted in the manner prescribed;
- requiring a licensee or certificate holder to complete CPE as specified;
- imposing on a licensee or certificate holder the direct administrative costs incurred by the board in taking disciplinary action;
- requiring a licensee or certificate holder to pay restitution;
- imposing an administrative penalty; or
- impose any combination of the above sanctions.
Furthermore, if TSBPA places a license or certificate holder on probation, TSBPA may require the individual to regularly report to it on matters that form the basis for the probation or limited practice to certain areas. TSBPA also may require individuals on probation to continue or renew continuing education until they have achieved a satisfactory degree of skill in an area that is the basis of the probation.
We Will Stand Up for Your Rights Before TSBPA
You can count on the experienced CPA license defense lawyers at Bertolino LLP, to defend you when you receive notice of disciplinary proceedings against you from TSBPA. We will investigate the circumstances that led to the disciplinary proceedings and devise the best defense strategy for your case. Together, we will work to clear your name and protect your teaching license. Call us at (512) 515-9518 or contact us online.