The Texas State Board of Public Accountancy (BPA) licenses and regulates certified public accountants (CPAs). As part of its duties, the BPA receives complaints about CPAs allegedly violating the laws and rules that govern them. It also brings formal disciplinary action against CPAs as needed. Obtaining experienced legal counsel to represent your interests in disciplinary proceedings before the BPA can be a significant step in reaching a positive outcome in your case. As a result, if you are facing a complaint before the BPA, you should consult a CPA license attorney for help.
When Can the BPA Take Disciplinary Action Against a CPA?
Under Tex. Occ. Code §901.502, the BPA may discipline CPAs 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 Texas law on the standards of practice of public accounting;
- A violation of a rule of professional conduct adopted by the BPA;
- 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 the BPA 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 the BPA; or
- a rule or order adopted by the BPA.
What Happens When the BPA Receives a Complaint about a CPA?
When the BPA receives a complaint about a CPA, it must screen it within 30 days and request additional information if needed. It initially will determine whether it has jurisdiction over the matter, in terms of whether the complaint concerns a licensed CPA, and whether the subject matter concerns an alleged violation of the rules or laws that govern CPAs.
What Happens if the BPA Decides to Investigate a Complaint?
The BPA has full discretion over opening an investigation into a complaint. If the BPA chooses to do so, it notifies the CPA about the complaint and ongoing investigation. The CPA can respond to the allegations in the complaint within 30 days of receiving notice of the investigation. The BPA also may request additional information related to its investigation from the CPA.
What Options Does the BPA Have for Resolving a Disciplinary Complaint?
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After the investigation is complete, a committee makes recommendations to the BPA about how to resolve the complaint. The BPA then may choose to:
- Dismiss the complaint;
- Dismiss the complaint, but issue a confidential letter to the CPA with comments and suggestions; or
- Initiate formal disciplinary proceedings.
What is an Informal Conference?
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The BPA may invite the CPA and the complaining party to an informal conference during the investigative process, which is completely voluntary. While a CPA may appear with an attorney, the CPA must agree to personally respond to any questions. Each party can make a brief presentation to the BPA, and the BPA can ask questions of the CPA and the complaining party concerning the allegations in the complaint.
What is an Agreed Consent Order?
An informal conference often marks the start of what can be a lengthy enforcement process. Sometimes, the BPA may offer, or the parties can negotiate an agreement or an Agreed Consent Order (ACO). An ACO contains findings of fact and conclusions of law about the alleged violation(s), as well as the proposed sanctions, penalties, and costs that the CPA must bear. The CPA has 20 days to accept or reject the ACO. If the CPA accepts the ACO, it goes to the BPA for approval.
As stated above, ACOs typically involve some type of sanction or conditions for a CPA to continue practicing. Failure to meet the conditions or observe the sanction outlined in the ACO can result in additional and more severe disciplinary action.
What Happens if the Parties Cannot Reach an Agreed Consent Order?
If the CPA and the BPA cannot reach an agreement, the CPA must request a hearing before the State Office of Administrative Hearings (SOAH) to further contest the BPA’s findings. Failure to request a contested hearing or respond to an ACO offer at this point will result in a proposed order of discipline being offered to the BPA for approval without a hearing or the CPA’s agreement.
How Does a Contested Hearing Before SOAH Work?
Under 22 Tex. Admin. Code §519.40, either the executive director of the BPA or an administrative law judge (ALJ) appointed by SOAH can oversee and hear the case. Both the BPA and the CPA can present evidence before the ALJ.
What is a Proposal for Decision?
After the hearing, the ALJ will issue a Proposal for Decision (PFD), which contains recommendations about resolving the disciplinary case. The ALJ submits that PFD to the BPA, which maintains the ultimate authority to decide on the disposition of the disciplinary complaint.
Can a CPA Challenge the Final Decision of the BPA on a Disciplinary Complaint?
When a CPA receives a final decision on a disciplinary complaint, they may file a motion for rehearing and seek judicial review of the order by filing an action in court.
What Sanctions Can the BPA Impose in a Disciplinary Proceeding?
Under 22 Tex. Admin. Code §519.41, the BPA can take one or more of the following actions against a CPA in a disciplinary proceeding:
- License revocation;
- License suspension;
- Refusal to renew a license;
- Placement on probation;
- Reprimand;
- Imposition of limitations on the scope of their practice;
- Completion of a peer review program;
- Completion of specified CPE;
- Assessment of direct administrative costs;
- Assessment of restitution; and
- Imposition of an administrative penalty.
What Happens if the BPA Places a CPA on Probation?
If the BPA places a CPA on probation, it may require them to:
- Regularly report to the BPA on matters related to the disciplinary complaint;
- Limit their practice to a certain area; and/or
- 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 Can Advocate on Your Behalf in Proceedings Before the TSBPA
The accountant license lawyers of Bertolino LLP can help guide you through the disciplinary complaint process. No matter what allegations you face, we are here to represent your interests and work to minimize the negative effects of a complaint on your license and career. We can help resolve the case against you and maintain your CPA license. Call us today at (512) 515-9518 to reach the offices of Bertolino LLP or contact us online.
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