Complaints and disciplinary actions against your Texas certified public accountant (CPA) certificate can be devastating. You have spent countless hours working to earn the credentials necessary for your CPA certificate, only to suffer what may be a major setback to your career. Without a license, you cannot operate your business, leaving you without financial support or a way to use your degree.
Enlisting the help of a certified public accountant license defense lawyer can help you fight back against complaints or disciplinary action that may affect your license. With legal assistance, you may also be able to negotiate the best possible resolution of the matter before the Texas State Board of Public Accountancy (TSBPA) and safeguard your career.
The Peer Review Program
Under 22 Tex. Admin. Code §527.1, the TSBPA has established a peer review program. The purpose of this program is to monitor the compliance of CPAs with accounting, auditing, and other attestation standards adopted by the TSBPA and other bodies with authority to set recognized standards. The program may involve education, remediation, disciplinary sanctions, or other corrective action where reporting does not comply with professional or regulatory standards.
Peer review programs review the work product of license holders or the CPA firms in which license holders are members to the extent necessary to comply with applicable standards. Tex. Occ. Code §901.159 states peer review must include “a verification that each individual in a certified public accountancy firm who is responsible for supervising attest services and who signs or authorizes another person to sign an accountant’s reports on financial statements on behalf of the firm meets the competency requirements of the professional standards that apply to those services.”
Who Must Participate in the Peer Review Program
All accounting firms licensed or registered with the TSBPA and performing any attest services defined under relevant sections of the Texas Administrative Code must participate in the peer review program through an approved sponsoring organization. More specifically, according to the TSBPA, firms must participate in the peer review process if they do audits, reviews, compilations, or other “special reports” that “purport to express an opinion that the financial statements or any material portion thereof are in accordance with GAAP and the CPA firm did its engagement in accordance with the Statement on Auditing Standards (SAS) or the Statement on Standards for Accounting and Review Services (SSARS) as it applies to Reviews and Compilations (only).” Firms that do not provide any of these services can claim an exemption from participation in the peer review program.
Required Submissions to the TSBPA
22 Tex. Admin. Code §527.6 requires CPA firms to submit the following documents to the TSBPA:
- A copy of the peer review report (PRR) and the Final Letter of Acceptance (FLOA) from the sponsoring organization, if such report has a rating of pass;
- A copy of the PRR, the firm’s Letter of Response (LOR), the Corrective Action Letter (CAL), and FLOA if the report has a rating of pass with deficiencies or fail; or
- A copy of any final report resulting from any inspection by the Public Company Accounting Oversight Board (PCAOB) firm inspection program, together with documentation of any significant deficiencies and findings and the firm’s response.
The Peer Review Oversight Board
The TSBPA maintains the Peer Review Oversight Board (PROB) under 22 Tex. Admin. Code §527.7. The purpose of the PROB, which consists of active licensed CPAs, is to:
- monitor sponsoring organizations to provide reasonable assurance that peer reviews are being conducted and reported in accordance with the Standards promulgated by the AICPA Peer Review Board;
- review the policies and procedures of sponsoring organization applicants as to their conformity with the peer review standards; and
- report to the board on the conclusions and recommendations reached as a result of performing these functions.
PROB shall follow certain procedures outlined in this code section to allow it to make annual recommendations to the TSBPA as to the qualifications of sponsoring organizations to continue to serve in that role. As part of these procedures, PROB shall provide the Peer Review Committee with an annual report as to the continued reliance on the sponsoring organizations’ peer reviews.
The Peer Review Report Committee
Under 22 Tex. Admin. Code §527.10, a Peer Review Report Committee (PRRC) is a group of CPAs practicing on a supervisory basis formed by a sponsoring organization. This code section further outlines the parameter of those CPAs who may serve on the PRRC.
The purpose of the PRRC is to accept peer review reports submitted by firms on peer review engagements. 22 Tex. Admin. Code §527.11 further outlines the responsibilities of the PRRC:
- establish and administer the sponsoring organization’s peer review program following the AICPA Standards;
- prescribe actions designed to ensure the correction of the deficiencies in the reviewed firm’s system of quality control policies and procedures;
- monitor the prescribed remedial and corrective actions to determine compliance by the reviewed firm;
- resolve instances in which there is a lack of cooperation and agreement between the committee and review teams or reviewed firms per the sponsoring organization’s adjudication process;
- act upon requests from firms for changes in the timetable of their reviews;
- appoint members to subcommittees and task forces as necessary to carry out their functions;
- establish and perform procedures providing reasonable assurance that reviews are performed and reported on following the AICPA Standards for Performing and Reporting on Peer Reviews;
- establish a report acceptance process, which facilitates the exchange of viewpoints among committee members;
- regularly communicate to the governing body of the sponsoring organization:
- problems experienced by the enrolled firms in their systems of quality control, as noted in the peer reviews conducted by the sponsoring organization;
- problems experienced in the implementation of the peer review program; and
- a summary of the historical results of the peer review program.
Get Legal Representation Today to Help Safeguard Your CPA License
After you have worked hard to finish your education and develop your career, receiving notice of a complaint against your certified public accountant license can be unexpected and disappointing. However, having a CPA license defense attorney on your team can be essential to a positive outcome in your case. You can reach the offices of Bertolino LLP, by calling (512) 515-9518 today or filling out our contact form online.