Keeping accurate records of a company’s financial transactions requires a high sense of responsibility and a keen eye for detail. With many clients relying on your services, even small errors could be noticed or viewed as suspicious. If you face accusations of accounting misconduct and risk losing your license, you must seek assistance from a skilled license defense lawyer.

At the San Francisco License Attorney, we have years of experience handling cases with the Board of Accountancy. Our team has a proven track record of protecting the licenses and careers of many CPA clients, and we are confident in our ability to do the same for you.

An Overview of The California Board of Accountancy

The California Board of Accountancy (CBA) is the regulatory body that oversees the professional conduct, licensure, and potential disciplinary actions of all CPAs. The CBA has the authority to issue four different types of licenses. These include:

  • An accounting firm

  • Accounting corporation

  • Accounting partnership

  • Certified public accountant (CPA)

The first three licenses are for companies, typically consisting of multiple accounting professionals. The last type of professional license is awarded to individuals who have completed the stringent examinations and requirements necessary to qualify as a CPA.

As a result, the CBA remains committed to its mission and core values of protecting the public from unethical or deceitful CPAs who might exploit their lack of financial knowledge. The Board prioritizes these tasks and focuses primarily on protecting the welfare of the general public rather than the interests of CPAs or accounting firms.

To accomplish its mission and uphold its core values, the CBA grants accounting licenses only to organizations or individuals deemed deserving, qualified, and capable of serving the public.

Potential CBA Disciplinary Measures

The CBA derives its power from various sources, such as:

  • California Business and Professions Code (BPC) Section 5000

  • California Accountancy Act (CAA)

  • Title 16, Sections 1 through 99.1 of the California Code of Regulations (CCR)

Thanks to these various statutes, the CBA now has the legal authority to establish an Enforcement Advisory Committee and an Enforcement Division. The board is authorized to supervise and regulate the activities of certified public accountants in California. This includes issuing, suspending, or revoking CPA licenses through its enforcement bodies. The Enforcement Advisory Committee and Enforcement Division regularly receive formal complaints and handle cases in which licensed certified public accountants have been convicted of crimes.

As a result, the CBA has a range of disciplinary measures at its disposal to enforce upon its licensees, including:

  • The dismissal of a recently filed application for a CPA license

  • Issuing a public letter, reprimand, or censure

  • A citation and administrative fines

  • The revocation or suspension of your license

  • Issuance of probation and a stay of revocation

  • If the misconduct is serious enough, there is the possibility of filing criminal and civil charges

Even slight disciplinary actions can significantly impact your standing, image, and earning potential. For instance, issuing a public reprimand and posting it online is considered one of the lighter punishments. However, since this disciplinary measure is public, you might experience a decline in revenue if you lose current clients or struggle to attract new ones.

If summoned for disciplinary proceedings, seek legal counsel as soon as possible. An experienced attorney can challenge the CBA’s imposition of disciplinary measures and protect your reputation from irreversible damage.

Actions That May Lead To Disciplinary Measures By the CBA

Once a formal complaint is filed, investigations will begin. While most complaints are deemed “unsubstantiated” and dismissed, caution is essential when dealing with matters affecting your reputation and livelihood. Therefore, you should treat every complaint seriously and promptly seek legal representation.

If the original complaint is not rejected, an administrative hearing will be conducted, with an administrative law judge (ALJ) presiding. During the hearing, the ALJ and CBA representatives will require official declarations of the alleged violations you, the licensee, have committed. They will also need clear descriptions of the alleged violations and your account of the alleged misconduct if you attend the hearing.

As a result, the CBA often takes disciplinary actions against several common violations or instances of misconduct, which include:

  • Engaging in accounting activities without a valid license

  • Engaging in accounting activities without the proper license

  • Making mistakes, being negligent, or displaying a lack of professionalism while carrying out your responsibilities as a licensed certified public accountant

  • Various violations and cases of unethical behavior that are categorized as “professional misconduct” or “unprofessional conduct” in most CBA proceedings

  • Using unaccepted accounting methods or those without a proven track record of effectiveness

  • Violation of financial and/or fiduciary obligation refers to breaching the legal responsibility in California to act in someone’s best interest due to a special relationship. This responsibility arises from the connection between the parties involved

  • Assisting and supporting the illegal act of evasion of taxes

  • Various white-collar or financial crimes, such as bribery, misappropriation of funds, forgery, money laundering, fraud, racketeering, embezzlement

  • A criminal record or conviction closely related to accounting responsibilities that could impact an individual’s suitability for the role. This includes white-collar crimes and other offenses mentioned in the following section

  • Facing disciplinary actions, probationary hearings, or licensing board proceedings from an out-of-state agency

Additionally, the CBA can collaborate with the Department of Justice to pursue criminal charges if your misconduct is determined to be a crime. If you are found guilty of such misconduct, your CPA license will be revoked. You will also be subject to criminal prosecution in the jurisdiction where the law was violated. In many cases, the allegations are brought at the federal level. Various law enforcement agencies may also be involved.

The CBA may take disciplinary action based on various forms of negligence. Such behavior could result in legal action by the CBA, possibly resulting in a civil lawsuit against you. If the misconduct amounts to criminal negligence, criminal charges could also be brought against the individual.

Approaching every potential complaint or Notice of Investigation with the utmost seriousness is crucial. You can seek the assistance of licensed attorneys when dealing with these situations. They have extensive experience handling all types of cases, including those that have advanced to criminal charges or civil allegations. Therefore, you should protect your accounting license, as it forms the foundation of your professional career.

What Happens After a Formal Complaint Is Filed?

Various reasons and sources exist for making a formal complaint. However, these complaints typically originate from dissatisfied clients who feel exploited. The CBA upholds its commitment to professionalism to protect the public from unscrupulous accountants who neglect their responsibilities and exploit their clients.

If the CBA and its various enforcement bodies find merit in the complaint, you will receive a Notice of Investigation. It usually takes about five months from the initial allegations before a final verdict is issued and disciplinary action is taken. You should seek legal representation as soon as you receive a Notice of the Investigation or learn of the complaint. This will significantly improve your chances of achieving a positive outcome in your case.

If you are proactive and contact a licensed attorney promptly, you may be able to challenge the original complaint immediately and have it dismissed. Currently, none of the proceedings have been publicized, so there will be no negative impact on your name and reputation.

If the CBA considers the initial complaint to be serious, it will file a case on behalf of the complainant. At this point, the situation becomes more serious as the formal accusation is posted online, which may lead to a temporary suspension of your CPA license. Your attorney will respond with a Notice of Defense, outlining their arguments against the allegations. They will also look into the possibility of lifting the temporary license suspension so that you can to make a living.

If the CBA has not dismissed the formal accusation after going through these steps, your case will proceed to a “formal administrative hearing” overseen by a judge. The hearings closely resemble civil court proceedings, with customary practices including:

  • Presentation evidence

  • Testimony from an expert

  • Eyewitness testimony

  • Examining other witnesses during the trial

A skilled legal team, well-versed in this particular area of law and the revocation or suspension of professional licenses, must carry out these procedures.

Aggravating and Mitigating Factors

As per Section 99.1 of the California Code of Regulations (CCR), Title 16, the presiding judge will consider “mitigating factors” presented by your defense attorneys and “aggravating factors” presented by the counselors appointed by the CBA. Consequently, your attorney can present several mitigating factors to reduce the severity of the disciplinary actions. This legal technique is used only in cases where obtaining a dismissal is impossible.

Some of these factors include the following:

  • If any harm occurred, it was minor and reversible

  • Nobody in the general public, including customers and clients, was harmed

  • There was no deliberate or malicious intention when committing the violation

  • The violation was committed rashly while under extreme pressure to deliver

  • The violation of financial or fiduciary duty was considered insignificant

  • The underlying motivation for the violation was not driven by greed. The license holder did not gain any financial benefits from their actions

  • The licensee fully cooperated with the CBA and investigators

  • The licensee has completed a rehabilitation program and demonstrated genuine remorse

  • The licensee made restitution to the alleged victims

  • If several people were involved, the alleged licensee bore the least responsibility

  • A long time has passed since the violations or offenses occurred

The board and its appointed professionals, who act as prosecutors in the administrative hearings, can present the judge with aggravating factors that may escalate the nature of the disciplinary proceedings.

These factors may include:

  • The owner of the license acted intentionally, deliberately, and with premeditation

  • The license holder has previously faced a similar disciplinary proceeding, thus demonstrating a consistent pattern of illegal conduct

  • A member of the public suffered serious financial losses

  • The license holder, driven by greed, profited substantially from their actions

  • The licensee intentionally engaged in such behavior despite knowing their actions would harm the other individual, particularly if that person is considered a “vulnerable citizen,” such as someone who is disabled or elderly

  • The licensee demonstrated criminal negligence, embezzled funds, or committed a serious violation of their fiduciary responsibilities

  • The licensee demonstrated noncompliance with the board and its investigators

If you fail to obtain a dismissal and are convicted of the violations, these factors can significantly impact the severity and nature of the disciplinary measures. Additionally, it is crucial to note that after the proceedings conclude and you receive your probation, penalties, and/or punishments, you will be obligated, under Section 5107 of the BPC, to repay the CBA for all expenses related to the prosecution and investigations. If you cannot promptly meet this financial obligation, your professional license attorney can help you secure a payment schedule.

How Will a Prior Criminal Conviction Affect My CPA License?

If you are accused of a crime, you should seek legal counsel as soon as possible. You may be unaware of the severity of the situation, and an experienced license attorney can review the evidence and charges against you. Law enforcement officers often collaborate with the Department of Justice and licensing boards to carry out “sting” operations for collecting evidence. In such cases, they may have gathered enough evidence to support their case.

The board can deny new applications for a certified public accountant license if the candidate has a prior conviction within the last seven years that is considered “substantially related” to their profession. Also, a criminal conviction could lead to the revocation or suspension of your CPA license if you currently hold one. The offense must also be “substantially related” to your practice.

Find a CPA License Defense Attorney Near Me

Becoming a Certified Public Accountant (CPA) requires hard work, commitment, and many years of study. Defending your license against complaints, investigations, or adverse actions taken by the California Board of Accountancy can be stressful. However, your professional license is crucial for sustaining your livelihood, your career, and your loved ones.

At San Francisco License Attorney, we understand the challenges of defending your license and the significant time, expense, and effort required to obtain a professional license. If your license to practice as a certified public accountant is in jeopardy, call us now at 415-919-6594. Our attorneys are ready to help you with your case.