• commentthecaseofKeriChisolm,ofCostaMesa,California.DescribethereasonsforherdisciplineandhowitreflectsonhercompetenceasaCPA.
• pdf page 19

UPDATE SPRING/SUMMER 2016 ISSUE NO. 81 PRESIDENT'S MESSAGE One of my top priorities for this year is to increase the outreach and communication efforts of the California Board of Accountancy (CBA). The CBA has always had an eye toward outreach, but this year I want to increase our efforts to reach out to our stakeholders. Outreach is a vital component of the CBA's mission to protect consumers. By reaching out to consumers, we ensure they know that the CBA is here to assist them and protect their interests. By reaching out to licensees, Katrina L. Salazar, CPA we ensure they are aware of the laws and rules President governing how they conduct themselves as professionals that are set in place to protect consumers. And by reaching out to prospective licensees, we ensure they know what is required to become a properly qualified licensee, which protects consumers as well. This past May, the CBA unveiled its new website (www.cba.ca.gov), which has enhanced consumer resources, including easier access to public enforcement documents, a simplified E-News subscription form, and consolidated information regarding how to select a CPA. This new design will also make it easier for all the CBA's stakeholders to find specific information they are looking for. So far this year, the CBA has participated in numerous outreach opportunities. In January, I spoke to the leadership of the California Society of Certified Public Accountants (CalCPA) in Sacramento regarding the CBA's objectives and priorities for 2016. This group of approximately 150 CPAs gathered in Sacramento as a part of CalCPA's annual Legislative Day. The CBA's Enforcement Chief was able to attend the National Association of State Boards of Accountancy Legal Conference, where he presented information regarding how the CBA conducts investigations. Vice President Alicia Berhow and staff went to the University of Southern California and California State University (CSU), Fullerton, to present information on the examination and licensure process to accounting students. They also provided an overview to the CSU, Fullerton, faculty of the educational requirements and information on the next version of the Uniform CPA Examination. CO N T I N U E D O N PAG E 2 IN THIS ISSUE PRESIDENT'S MESSAGE 1 MESSAGE FROM THE EXECUTIVE OFFICER 2 NEXT VERSION OF THE CPA EXAM 3 DON'T LET AN UNPAID CITATION CREATE A DISAPPOINTING TAX RETURN 4 HOW MANY CPAS ARE THERE IN THE UNITED STATES? 4 CBA MEMBERS, COMMITTEE CHAIRS, AND STAFF 4 INTERVIEW WITH FORMER CBA MEMBER SALLY ANDERSON 5 CBA EXAMINES EMPLOYEE BENEFIT PLAN AUDIT PERFORMANCE 6 MOBILITY LAW: CBA WORKING TO PROTECT THE PUBLIC 6 UNDER THE DOME 7 PRESIDENTS OF THE CBA 8 FUTURE MEETINGS 9 ANNUAL REPORTS PUBLISHED BY THE CBA 9 ATTEST STUDY RESULTS ARE IN! 10 POLICY OF NONDISCRIMINATION 10 CBA LAUNCHES REDESIGNED WEBSITE 11 CBA FEES RETURNING TO 2014 LEVELS 11 WHERE THE MONEY GOES 11 ENFORCEMENT PROCESS 12 STANDARD TERMS OF PROBATION 12 ENFORCEMENT DEFINITIONS 13 ENFORCEMENT ACTIONS 14 ADDRESS CHANGE FORM 38 CBA DIRECTORY 39 LIST OF CONTRIBUTORS BACK C A LI FO R N IA BOA R D O F ACCO UN TA N CY News let t e r C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er PRESIDENT'S MESSAGE CO NT INUED F RO M PAGE 1 In April, the CBA hosted a booth at a Financial Literacy Fair on the steps of the State Capitol. The booth was set up to allow consumers to check their CPA's license online, follow CBA's social media accounts, and subscribe to E-News. We also discussed our mission of consumer protection and handed out informational materials. At May's Accounting Day 2016 event in San Diego, CBA Vice President Berhow had the opportunity to speak about the CBA's license renewal process and continuing education requirements. But these are just the beginning of our outreach efforts. Later this year, the CBA will send a speaker to Golden Gate University to participate in the Braden Leadership Speaker Series. This is a 15-week speaker series on business leadership in which various leaders share advice and expertise with students, alumni, and the San Francisco-Bay Area community at large. The CBA will also collaborate with CalCPA to put on an event titled, \"So You Want to be a CPA?\" Tentatively scheduled for September, the event will be held at the University of California, Davis. This presentation will also be live webcast to students throughout California. Finally, the CBA continues its efforts to increase its presence on social media. If you have not already done so, I encourage you to follow the CBA on LinkedIn, Facebook, and Twitter, where you will receive information from the CBA about issues such as mobility, license renewals, and more. Katrina L. Salazar, CPA President MESSAGE FROM THE EXECUTIVE OFFICER In an effort to reduce waste and lessen its environmental impact, the CBA is in the midst of transitioning to electronic tablets during CBA meetings. This effort coincides with the CBA's 2016-18 Strategic Plan, which includes an objective to \"seek authorization to purchase mobile devices for members to view CBA meeting materials, which will reduce paper consumption and lessen the environmental impact.\" The tabletsMicrosoft Surface Pro 3swill enable CBA members and staff to view meeting materials electronically during CBA meetings and include the capability to make notes directly on the electronic documents. 2 By transitioning to the tablets, the CBA will realize significant savings. This is an exciting project, and the CBA is one of the first boards at the Department of Consumer Affairs to roll out tablet devices in an effort to save money and the environment. Patti Bowers Executive Officer U P D AT E SPRING/SUMMER 2016 NEXT VERSION OF THE CPA EXAM On April 4, 2016, the American Institute of Certified Public Accountants (AICPA) released details regarding the next version of the Uniform Certified Public Accountant Examination (CPA Exam) that will launch on April 1, 2017. The CPA Exam will remain composed of the four existing sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). The next version of the CPA Exam is based on a practice analysis, an extensive research project overseen by the AICPA's Board of Examiners that included input from key stakeholders across the accounting profession. The result maintains the strong commitment of the profession to protect the public interest, and the next CPA Exam remains current, relevant, reliable, and legally defensible. The CPA Exam meets the needs of boards of accountancy by providing reasonable assurance that individuals who pass have the technical knowledge and skills necessary for licensure. To increase candidate convenience, there will be a 10-day extension of the testing window each quarter into the usual nontesting months of March, June, September, and December. The 10-day extension will not be available during the initial launch testing window in June 2017, as additional time will be required to analyze exam results and set new passing scores. In addition, administration of the new exam will include a 15-minute standardized break during each section that will not count against a candidate's testing time. Any combination of passing current CPA Exam sections and passing next CPA Exam sections (within the 18-month window following passing one section) will count toward licensure. Among the changes to the next version of the CPA Exam: Increased assessment of higher-order cognitive skills that include, but are not limited to, critical-thinking, problem-solving, and analytical ability. Additional task-based simulations will be included, which are an effective way to assess higher-order skills. New exam blueprints containing approximately 600 representative tasks across all four CPA Exam sections will replace the Content Specification Outline (CSO) and Skill Specification Outline (SSO). These blueprints are more robust than the CSO and SSO, identifying content knowledge linked directly to representative tasks performed by newly licensed CPAs. Total CPA Exam testing time will increase from 14 to 16 hoursfour sections of four hours each. For more information on the next version of the CPA Exam, visit the CBA website to view \"Next Version of the Uniform CPA Examination: Core Message Points\" (www.dca. ca.gov/cba/applicantsext-exam-message.pdf ). A listing of frequently asked questions may also be found on the CBA website at www.dca.ca.gov/cba/applicantsext-examfaqs.pdf. FOLLOW US ON TWITTER @CBANEWS FACEBOOK.COM/CBANEWS LINKEDIN.COM CALIFORNIA BOARD OF ACCOUNTANCY 3 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er DON'T LET AN UNPAID CBA CITATION CREATE A DISAPPOINTING TAX RETURN Do you have an unpaid CBA citation? If so, you may find a change in your tax return this year. The CBA has begun participating in the Franchise Tax Board (FTB) Interagency Intercept Collection Program. This program was created in 1975 to enable State agencies to collect delinquent debts owed by California residents to State agencies by intercepting State payments from personal income tax refunds, unclaimed property claim payments, or California State Lottery winnings. This program offsets these funds and transfers them to pay debts owed to agencies and colleges. Over the past two decades, the program has redirected more than $3 billion to various State agencies, cities, and counties. To date, more than $276,000 in outstanding balances have been referred from the CBA to the FTB for collection. HOW MANY CPAS ARE THERE IN THE UNITED STATES? Thanks to the ongoing efforts of the National Association of State Boards of Accountancy (NASBA) and the various state boards of accountancy, there are now 51 jurisdictions sending licensee data to CPAverify. CPAverify is an online tool that allows consumers to look up the status of any CPA licensed in the participating jurisdictions. A new CPA population statistic that represents the total number of individual CPAs that are considered to be in an \"active\" status is now possible, thanks to CPAverify. As of April 2016, there are 664,532 actively licensed CPAs in the 51 participating jurisdictions, which include California. NASBA will continue to publish this new statistic, updated quarterly, on its website. The CBA works diligently to help licensees stay in compliance and avoid citations. If you receive a citation, you must respond within the timeframe listed on the citation to avoid being referred to the FTB's Interagency Intercept Collection Program. If you cannot afford to pay the citation, contact the CBA to discuss the possibility of a payment plan. CBA MEMBERS Katrina L. Salazar, CPA, President Alicia Berhow, Vice President Michael M. Savoy, CPA, Secretary/Treasurer Jose A. Campos, CPA Herschel T. Elkins, Esq. George Famalett, CPA Karriann Farrell Hinds, Esq. Laurence (Larry) Kaplan Kay Ko Leslie J. LaManna, CPA 4 Xochitl A. Leon Jian Ou-Yang, CPA Deidre Robinson Mark J. Silverman, Esq. Kathleen K. Wright, JD, CPA, LLM, MBA COMMITTEE CHAIRS Joseph Rosenbaum, CPA Enforcement Advisory Committee Robert Lee, CPA Peer Review Oversight Committee Joanna Bolsky, CPA Qualifications Committee CBA STAFF Patti Bowers, Executive Officer Deanne Pearce, Assistant Executive Officer Dominic Franzella, Enforcement Chief Gina Sanchez, Licensing Chief Matthew Stanley, UPDATE Managing Editor Terri Dobson, UPDATE Production U P D AT E SPRING/SUMMER 2016 INTERVIEW WITH FORMER CBA MEMBER SALLY ANDERSON First of all, can you start out by telling us a little about your career as a licensee of the CBA? I attended school in Massachusetts, and after the required three years of experience, I received my Massachusetts CPA license in 1976. I started my career as an Sally Anderson, CPA auditor with Peat, Marwick, Mitchell at their Boston office, but later moved to their office in Newport Beach. I received my California CPA license in June 1979. I then spent a few years in private industry as a controller before joining E&Y [Ernst and Young] in 1984 where I spent the remainder of my career. I retired from Ernst and Young in 2008. I still keep my license current as I am the audit committee chair for two public companies. The Securities Exchange Commission requires that at least one board person qualify as a "financial expert" on every public company, and I feel that being a California-licensed CPA demonstrates that expertise. Why did you want to be a member of the CBA? Actually, when my firm suggested that I apply for a position on the CBA, I didn't know much about it. As a part of one of the large firms, we had a lot of support structure for CPAs in place. As I researched the CBA, I discovered that the smaller firms didn't have this and relied on the excellent information provided by the CBA. I thought it would be interesting and a chance to learn; in addition, I wanted to give back to a career that had treated me so well. When did you begin your first term? I was appointed to the CBA by Governor Schwarzenegger in May 2007. Were you surprised by anything when you began working with the CBA, or did everything work as you expected? Well, I didn't know what to expect. Most of my time initially was spent on figuring out what my responsibilities were. At first, I was overwhelmed by the amount of materials that were produced for each meeting, and I certainly didn't realize how much time I would be spending on enforcement matters. What did you enjoy most about serving on the CBA? The people. I really enjoyed meeting all of the other members. It was a joy to serve with them all. I was particularly impressed with the public members who were so willing to give their time and intellect to a profession that was not their own. The CBA staff was a pleasure to work with as well. You served in CBA Leadership, including a year as the CBA President; what prompted you to seek a leadership position? I saw it as a great opportunity to see behind the scenes, learn how the staff functions, and how the whole process works. As I said earlier, it was a chance to learn. Of all the accomplishments during your time on the CBA, of what are you most proud? There are two things, actually. First, I was proud to be a part of the development of the new educational requirements for licensure. The bulk of that work was accomplished during 2011 when I was the President of the CBA. That was a major undertaking that set the direction of licensure in California for years to come. I am honored that such important work took place while I was President. Second, I was a part of the subcommittee tasked with hiring a new Executive Officer in 2008. I am very proud that I played such a large role in the selection of Patti Bowers as our Executive Officer. She was the perfect choice as she is calm, controlled, and always prepared. CO N TI N UE D O N PAGE 6 5 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er INTERVIEW WITH FORMER CBA MEMBER SALLY ANDERSON CO NT INUED F RO M PAGE 5 Describe your time on the CBA. It was very fulfilling to give back to my profession in that way. There were always interesting topics being discussed, and it was satisfying to learn something new every day. What qualities make an excellent CBA member? An excellent CBA member must be willing to listen, but also be willing to speak their own opinions. As a corollary to that, they must come prepared for every meeting; this is the only way to be prepared to hear and speak. CBA EXAMINES EMPLOYEE BENEFIT PLAN AUDIT PERFORMANCE In May 2015, the United States Department of Labor (DOL) Employee Benefit Security Administration published a report titled \"Assessing the Quality of Employee Benefit Plan Audits.\" In the report, the DOL found that 39 percent of these audits contained major deficiencies with respect to one or more relevant generally accepted auditing standards requirements. At the CBA's January and March 2016 meeting, the CBA heard presentations regarding this topic from Jim Brackens, Vice-President of Ethics and Practice Quality, American Institute of Certified Public Accountants; Maria Caldwell, Chief Legal Officer and Director of Compliance Services, National Association of State Boards of Accountancy; and Ian Dingwall, Chief Accountant, DOL. The CBA will continue to have discussions to determine whether any changes need to be made to ensure consumer protection in the area of employee benefit plan audits. The full DOL report can be found at www.dol.gov/ebsa/ pdf/2014AuditReport.pdf. 6 MOBILITY LAW: CBA WORKING TO PROTECT THE PUBLIC Although California's no-notice, no-fee mobility law has been in place for two years, it will continue to be reviewed by the CBA and the Legislature for some time to ensure it is consistent with the CBA's duty to protect the public. To assist in this process, the Mobility Stakeholder Group (MSG) has been meeting regularly to give its recommendations to the CBA. The CBA is required by law to review the enforcement practices of other state boards of accountancy to determine whether allowing licensees from a given state to practice in California violates the CBA's duty to protect consumers. The CBA continues to collaborate with the National Association of State Boards of Accountancy in conducting the research that will assist the CBA in making these determinations. A final report will be issued to the Legislature on January 1, 2018. The MSG membership consists of the following: Jose A. Campos, CPA, Chair and CBA Member Joseph P. Petito, Esq., Vice Chair and Accounting Profession Representative Don Driftmier, CPA, Accounting Profession Representative Dominic Franzella, CBA Enforcement Division Chief Edward Howard, Esq., Consumer Representative Michael M. Savoy, CPA, CBA Member Stuart Waldman, Esq., Consumer Representative U P D AT E SPRING/SUMMER 2016 UNDER THE DOME The second half of the legislative year is upon us, and the CBA is already active in the legislative process. Here are a few bills the CBA has taken positions on and that may be of interest to licensees and other stakeholders: Assembly Bill 2560, Senate Bill 1479, SB 1155, and SB 1348. AB 2560 (Obernolte) relates to the CBA's practice privilege program, which allows for out-of-state licensees to practice in California without giving notice or paying a fee. If the CBA determines that allowing individuals from a particular state to practice in California under a no-notice, no-fee practice privilege violates its duty to protect the public, it shall require, by regulation, out-of-state individuals licensed from that state, to file the notification form and pay the fees as required under the notice and fee practice privilege program. AB 2560 would grant the CBA the legislative authority to adopt emergency regulations to expedite the rulemaking process related to removing states from the practice privilege program in order to best protect consumers. The CBA is the sponsor of this bill. SB 1479, the Senate Business, Professions and Economic Development Committee's annual omnibus bill, includes a proposal that would add flexibility to the ethics study requirements by changing it from a specific title requirement to a subject requirement. This change does not expand the disciplines in which the ethics education can be earned. Many of California's colleges and universities have made changes to their course titles to assist their students in complying with the existing ethics requirement, which became effective on January 1, 2014. However, the requirement of specific terms in the course title may be too restrictive for applicants who received their college education outside of California or prior to the law becoming effective. The CBA took a Support position on this bill. SB 1155 (Morrell) and SB 1348 (Cannella) both relate to assisting military personnel. SB 1155 would add a new section to the Business and Professions Code requiring the Department of Consumer Affairs to establish and maintain a program that grants a fee waiver for the application for and issuance of a license to an individual who is an honorably discharged veteran. SB 1348 would require each board, with a governing law authorizing veterans to apply military experience and training toward licensure requirements, to post information on the board's website about the ability of veteran applicants to apply their military experience and training toward licensure requirements. The CBA took a Support position on both bills as they are in line with the CBA's stance on offering assistance to military personnel. For a complete list of all the legislation the CBA is following, visit the \"Pending Legislation\" section on the CBA website, www.dca.ca.gov/cba/about-cba/ pending-legislation.shtml. 7 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er PRESIDENTS OF THE CBA Since the inception of the CBA in 1901, 26 members have served as CBA President. In 1907, the CBA determined that it would elect a President, Vice President, and Secretary/Treasurer at its annual meeting, and the officers would hold office until their successor was appointed or elected. Today, the CBA President is elected for a one-year term and may not serve more than two consecutive terms. Mr. Prentiss Maslin, CPA, served as the first CBA President until 1906, though his exact date of appointment was destroyed in the great San Francisco fire. Mr. John F. Forbes, CPA, served as President for more than 30 years from 1914 until 1945. In 1992, the CBA appointed the first woman President, Janice Wilson, CPA. Here is a list of the CBA Presidents and their terms: PRESIDENT TERM OF OFFICE Brenton B. Bradford, CPA 10/1/1971-1/27/1973 Robert A. Mellin, CPA 1/27/1973-2/2/1974 Anthony Guntermann, CPA 2/2/1974-2/1/1975 Brenton B. Bradford, CPA 2/1/1975-1/31/1976 C. Richard Spriggs, CPA 1/31/1976-1/29/1977 Robert A. Mellin, CPA 1/29/1977-6/2/1979 Morton Levy, CPA 6/2/1979-4/26/1980 Gilbert Vasquez, CPA 4/26/1980-12/3/1980 Robert E. Billings, CPA 12/5/1980-1/1/1983 Thomas Lino, CPA 1/29/1983-2/2/1985 James J. Sullos Jr. , CPA 2/2/1985-1/31/1987 Sam Yellen, CPA 1/31/1987-1/28/1989 Jack Kazanjian, CPA 1/28/1989-2/2/1991 Prentiss Maslin, CPA Unknown-6/23/1906 Ira Landis, CPA 2/2/1991-11/14/1992 Alfred G. Platt, CPA 6/23/1906-4/20/1907 Janice Wilson, CPA 11/14/1992-12/4/1993 John Hoesch, CPA 4/20/1907-8/15/1908 Avedick Poladian, CPA 12/4/1993-11/18/1995 Prentiss Maslin, CPA 8/15/1908-12/31/1914 Robert J. Shackleton, CPA 11/18/1995-11/21/1997 John F. Forbes, CPA 12/31/1914-12/6/1945 Diane Rubin, CPA 11/21/1997-11/20/1998 James E. Hammond, CPA 12/6/1945-2/9/1950 H.E. \"Mik\" Mikkelsen, CPA 11/20/1998-11/19/1999 Ira N. Frisbee, CPA 2/9/1950-1/29/1953 Baxter Rice 11/19/1999-11/17/2000 Francis P. Farquhar 1/29/1953-1/28/1955 Donna McCluskey, CPA 11/17/2000-11/16/2001 George O. Carlson 1/28/1955-2/3/1958 Navid Sharafatian, Esq. 11/16/2001-11/15/2002 Hilliard R. Giffen, CPA 2/3/1958-2/9/1959 Wendy Perez, CPA 11/15/2002-11/14/2003 George Gibbs, CPA 2/9/1959-3/17/1960 Ian Thomas 11/14/2003-11/19/2004 Rudolph A. Phillips 3/17/1960-1/20/1961 Renata Sos, Esq. 11/19/2004-11/18/2005 DeWitt Alexander 1/20/1961-1/19/1962 Ronald Blanc, Esq. 11/18/2005-12/1/2006 Charles W. Lamden, CPA 1/19/1962-1/19/1963 David Swartz, CPA 12/1/2006-11/16/2007 Carl Dechow Jr. , CPA 1/19/1963-2/01/1964 PRESIDENT TERM OF OFFICE Donald Driftmier, CPA 11/16/2007-11/21/2008 Andrew P. Marincovich, CPA 2/1/1964-1/23/1965 Robert Petersen, CPA 11/21/2008-11/19/2009 Joseph F. Spilberg, CPA 1/23/1965-1/29/1966 Manuel Ramirez, CPA 11/19/2009-11/18/2010 James Logan Smith, CPA 1/29/1966-1/28/1967 Sarah (Sally) Anderson, CPA 11/18/2010-11/18/2011 Carl Dechow Jr. , CPA 1/28/1967-1/27/1968 Marshal Oldman, Esq. 11/18/2011-11/16/2012 Andrew P. Marincovich, CPA 1/27/1968-1/24/1969 Leslie LaManna, CPA 11/16/2012-11/22/2013 Joseph F. Spilberg, CPA 1/24/1969-1/31/1970 Michael M. Savoy, CPA 11/22/2013-11/21/2014 Harry Magill 1/31/1970-1/30/1971 Jose A. Campos, CPA 11/21/2014-11/19/2015 Robert Whyte 1/30/1971-8/31/1971 (Resigned) Katrina L. Salazar, CPA 11/19/2015-Present 8 U P D AT E SPRING/SUMMER 2016 FUTURE MEETINGS JULY 7, 2016 AUGUST 19, 2016 Enforcement Advisory Committee Meeting Peer Review Oversight Committee Meeting JULY 21, 2016 SEPTEMBER 15, 2016 Mobility Stakeholder Group Meeting Mobility Stakeholder Group Meeting JULY 21-22, 2016 SEPTEMBER 15-16, 2016 CBA and Committee Meetings CBA and Committee Meetings Doubletree by Hilton Sacramento 2001 Point West Way Sacramento, California 95815 (916) 929-8855 Hilton Los Angeles Airport 5711 West Century Boulevard Los Angeles, California 90045 (310) 410-4000 Hilton Los Angeles Airport 5711 West Century Boulevard Los Angeles, California 90045 (310) 410-4000 JULY 27, 2016 Qualifications Committee Meeting Hilton Los Angeles Airport 5711 West Century Boulevard Los Angeles, California 90045 (310) 410-4000 California Board of Accountancy 2000 Evergreen Street, Suite 250 Sacramento, California 95843 (916) 263-3680 Hilton Los Angeles Airport 5711 West Century Boulevard Los Angeles, California 90045 (310) 410-4000 Hilton Los Angeles Airport 5711 West Century Boulevard Los Angeles, California 90045 (310) 410-4000 CBA and committee meetings are open to the public. Consumers, licensees, and all interested persons are encouraged to attend. As meeting locations become known, they will be posted on the CBA website at www.cba.ca.gov and will also be available by calling the CBA office at (916) 263-3680. Public notices and agendas are posted to the website at least 10 days prior to meetings. All CBA meetings are available to the public via live webcast at www.cba.ca.gov. ANNUAL REPORTS PUBLISHED BY THE CBA The following reports are now available on the CBA website: Mobility Stakeholder Group 2015 Annual Report: www.dca.ca.gov/cba/ communications-and-outreach/msg-rpt-2015.pdf Peer Review Oversight Committee 2015 Annual Report: www.dca. ca.gov/cba/communications-and-outreach/proc_rpt_2015.pdf 9 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er ATTEST STUDY RESULTS ARE IN! In 2013, the CBA began examining California's experience requirement for CPA licensure. As part of this examination, in 2014, the CBA initiated a study to gather feedback from stakeholders regarding whether the present 500-hour attest experience requirement was necessary and sufficient to support the CBA mission to protect consumers by ensuring only qualified licensees practice public accountancy in accordance with professional standards. The development and implementation of the study for both California licensees and licensees nationwide took place in 2014 and 2015. At its March 17-18, 2016, meeting, the CBA discussed the results of the study. The third-party consultant, CPS HR Consulting, which was selected to assist with facilitation of the study, reported on detailed data from the Californiaspecific survey. The CBA also heard details regarding the national survey performed by staff. The California-specific survey results showed that the majority of respondents in most stakeholder groups wanted to maintain the existing attest experience requirement. The only exception to this was the pending applicants for licensure who did not complete the attest experience requirement; the majority of that group wanted to eliminate the attest experience requirement. The national survey result showed that only five of the 35 responding states currently maintain an attest experience requirement. One of the five is considering elimination of its attest experience requirement. However, of the 30 states that do not currently maintain an attest experience requirement, two reported that they are considering reinstating their attest experience requirement, with one state reporting that it had experienced a significant increase in issues related to the failure to follow professional standards. As a result of its discussion, the CBA concluded that the 500-hour attest experience requirement is sufficient to ensure a minimum level of competency for entry into the profession. Additionally, the CBA concurred that it would (1) increase outreach efforts in educating stakeholders regarding the difference between CPA licensure obtained with \"general\" versus \"attest\" experience, (2) periodically evaluate the experience requirement for necessary changes, if any, and (3) watch for changes in other states' attest experience requirements that may impact California. The complete report of the CBA's Report of the Attest Experience Requirement Survey 2015 is available for viewing on the CBA website at www.dca.ca.gov/cba/ communications-and-outreach/attest-study.pdf. POLICY OF NONDISCRIMINATION ON THE BASIS OF DISABILITY AND EQUAL EMPLOYMENT OPPORTUNITY The California Board of Accountancy does not discriminate on the basis of disability in employment or in the admission and access to its program and activities. An Americans with Disabilities Act (ADA) coordinator has been designated to coordinate and carry out this agency's compliance with the nondiscrimination requirements of Title II of the ADA. Information concerning the provisions of the ADA, and the rights provided thereunder, is available from: ADA Coordinator California Board of Accountancy 2000 Evergreen Street, Suite 250 Sacramento, CA 95815-3832 10 U P D AT E SPRING/SUMMER 2016 CBA LAUNCHES REDESIGNED WEBSITE CBA FEES RETURNING TO 2014 LEVELS Have you seen the CBA's new website? It has been completely redesigned to better serve our stakeholders. Our home page now displays current announcements and upcoming events. Check it out at www.cba.ca.gov. The CBA's second year of a two-year fee reduction ended on June 30, 2016. Beginning on July 1, 2016, fees reverted to the levels at which they were on June 30, 2014. On the website, you can also subscribe to E-news, the CBA's e-mail subscription lists. You can choose which topics interest you and sign up to receive an e-mail when the CBA has new information on those topics. The following table highlights the affected fees. FEE CATEGORY And while you are on the website, you can also follow us on social media. Pick your favorite, or follow us on all of them. The social media services that are used by the CBA can be found on our home page along with links directly to the CBA on those platforms. The CBA regularly posts useful information and tips. FEE PRIOR TO JULY 1, 2016 FEE AS OF JULY 1, 2016 License Renewal $50 $120 Initial Licensure $50 $120 Examination Application (First-time sitter) $50 $100 Examination Application (Repeat sitter) $25 $50 Application for CPA Licensure $50 $250 Application for Firm Licensure $30 $150 WHERE THE MONEY GOES Every year, the CBA is appropriated a maximum amount of funding to carry out its mission of consumer protection. These amounts are based on the prior year's budget and are then adjusted to account for any program changes and administrative adjustments approved or ordered by the Department of Finance. The CBA's total budget is set at $14,469,000 for Fiscal Year (FY) 2015-16. The CBA allocates its budget to various organizational units to best attain its consumer protection goals while also striving to provide the best customer service to its stakeholders. The chart on the right depicts all of the organizational units comprising the CBA and their associated funding levels for FY 2015-16. CBA 2015-16 ALLOCATIONS NET TOTAL EXPENDITURE BUDGET: $14,469,000 RENEWAL $1.59M (11.0%) ADMINISTRATION $2.45M (16.9%) PRACTICE PRIVILEGE $116K (0.8%) BOARD $203K (1.4%) LICENSING ADMINISTRATION $666K (4.6%) INITIAL LICENSING $1.45M (10.0%) EXECUTIVE $666K (4.6%) EXAMINATIONS $1.08M (7.5%) ENFORCEMENT $6.25M (43.2%) 11 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er ENFORCEMENT PROCESS When the CBA receives a complaint, an investigation is conducted. Information regarding a complaint generally is gathered by enforcement staff, often accompanied by a licensee's appearance before the CBA Enforcement Advisory Committee. Following this investigation, a recommendation is made to either (1) close the case with no violation of the Accountancy Act or CBA Regulations; (2) require the licensee to take prescribed continuing education; (3) issue a citation and fine; or (4) refer the case to the Attorney General's Office for review and possible preparation of an accusation against the licensee or a statement of issues relating to the applicant. If charges are filed against a licensee, a hearing may be held before an independent administrative law judge who submits a proposed decision to be considered by the CBA, or the matter may be settled. The CBA may either accept the proposed decision or decide the matter itself. Please note that CBA actions reported here may not be final. After the effective date of the CBA's decision, the licensee may obtain judicial review of its decision. On occasion, a court will order a stay of the CBA's decision or return the decision to the CBA for reconsideration. Copies of the accusations, decisions, and settlements regarding any of these disciplinary and/or enforcement actions are available on the CBA website, www.cba.ca.gov, or by sending a written request to: California Board of Accountancy Attention: Disciplinary/Enforcement Actions 2000 Evergreen Street, Suite 250 Sacramento, CA 95815-3832 Please state the licensee's name and license number, and allow 10 days for each request. STANDARD TERMS OF PROBATION The CBA may revoke, suspend, or impose probation on a license for violation of applicable statutes or regulations. In addition to any case-specific terms of probation, the standard probationary terms include: Obey all Federal, California, other state, and local laws, including those rules relating to the practice of public accountancy in California. Submit, within 10 days of completion of the quarter, written reports to the CBA on a form obtained from the CBA. The respondent shall submit, under penalty of perjury, such other written reports, declarations, and verification of actions as are required. These declarations shall contain statements relative to respondent's compliance with all the terms and conditions of probation. Respondent shall immediately execute all release of information forms as may be required by the CBA or its representatives. During the period of probation, appear in person at interviews or meetings as directed by the CBA or its designated representative, provided such notification is accomplished in a timely manner. Comply with the terms and conditions of the probation imposed by the CBA, and cooperate fully with representatives of the CBA in its monitoring and investigation of the respondent's compliance with probation terms and conditions. Be subject to and permit a \"practice investigation\" of the respondent's professional practice. Such \"practice investigation\" shall be conducted by representatives of the CBA, provided notification of such review is accomplished in a timely manner. Comply with all final orders resulting from citations issued by the CBA. In the event respondent should leave California to reside or practice outside this State, respondent must notify the CBA in writing of the dates of departure and CO N TI N UE D O N PAGE 13 12 U P D AT E SPRING/SUMMER 2016 ENFORCEMENT PROCESS CO NT INUED F RO M PAG E 12 return. Periods of non-California residency or practice outside the State shall not apply to reduction of the probationary period, or of any suspension. No obligation imposed herein, including requirements to file written reports, reimburse the CBA costs, or make restitution to consumers, shall be suspended or otherwise affected by such periods of out-of-state residency or practice, except at the written direction of the CBA. If respondent violates probation in any respect, the CBA, after giving respondent notice and an opportunity to be heard, may revoke probation and carry out the disciplinary and/or enforcement order that was stayed. If an accusation or a petition to revoke probation is filed against respondent during probation, the CBA shall have continuing jurisdiction until the matter is final, and the period of probation shall be extended until the matter is final. Upon successful completion of probation, respondent's license will be fully restored. ENFORCEMENT DEFINITIONS Accusation A formal document that charges violation(s) of the California Accountancy Act and/or CBA Regulations by a licensee. The charges in the accusation are allegations. Allegations are not a final determination of wrongdoing and are subject to adjudication and final review by the CBA pursuant to the Administrative Procedure Act. Cost Recovery The licensee is ordered to pay the CBA certain costs of investigation and prosecution including, but not limited to, attorney's fees. Default Decision The licensee failed to file a Notice of Defense or has otherwise failed to request a hearing, object, or otherwise contest the accusation. The CBA takes action without a hearing based on the accusation and documentary evidence on file. Effective Date The date the disciplinary decision becomes operative. Probation The licensee may continue to engage in activities for which licensure is required, under specific terms and conditions. Reinstatement A revoked license that is restored, not sooner than one year from the date of revocation, to a clear or inactive status after petition to and approval by the CBA. Reinstatement may include probation and/or terms and conditions. Revocation The individual, partnership, or corporation no longer is licensed as a result of a disciplinary action. Stayed The action does not immediately take place and may not take place if the licensee complies with other conditions (such as a probation term). Stipulation The matter is negotiated and settled without going to hearing. Surrendered The licensee has surrendered the license. The individual, partnership, or corporation no longer is licensed. The CBA, however, may impose discipline against a surrendered license in certain circumstances. Surrender also may require certain conditions be met should the former licensee ever choose to reapply for licensure. Suspension The licensee is prohibited for a specific period of time from engaging in activities for which licensure is required. 13 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er ENFORCEMENT ACTIONS CPA REVOCATIONS THROUGH APRIL 24 , 2016 ADAMS, JAMES T. James T. Adams, CPA, Administrative Proceeding File Manhattan Beach, CA No. 3-15876, the SEC ordered Mr. Adams to cease and (CPA 85924) desist from committing or causing any violations and CBA ACTIONS any future violations of Rule 2-02(b)(1) of Regulation S-X and Section 13(a) of the Exchange Act and Rule Revocation of CPA License, via default decision. 13a-1 promulgated thereunder and denied the privilege Effective April 24, 2016 of appearing or practicing before the SEC as an CAUSE FOR DISCIPLINE Accusation No. AC-2015-77 contains the following allegations: accountant. Mr. Adams is subject to disciplinary action in that he committed dishonest acts. Mr. Adams is subject to disciplinary action in that he Mr. Adams is subject to disciplinary action in that received a suspension or revocation of the right to Respondent was disciplined by the United States practice before any governmental body or agency. Securities and Exchange Commission (SEC). Mr. Adams is subject to disciplinary action in that he On or about May 20, 2014, pursuant to an Order failed to notify the CBA within 30 days of the SEC's Instituting Public Administrative and Cease-And-Desist Order. Proceedings, pursuant to Sections 4C and 21C of the SEC Act of 1934 and Rule 102(e) of the SEC's Rules VIOLATION(S) CHARGED of Practice, Making Findings, and Imposing Remedial Business and Professions Code, Division 3, Chapter 1, Sanctions and a Cease-And-Desist Order, Release No. 5063, 5100 (c), (h), and (l). 72198, in a disciplinary action entitled In the Matter of ANDRADE, ANTHONY LEE without a valid permit. After Mr. Andrade failed to Salinas, CA renew his certificate, he represented several clients, (CPA 94526) completed tax returns, and completed an attest CBA ACTIONS Revocation of CPA License, via default decision. Effective April 24, 2016 CAUSE FOR DISCIPLINE engagement. Mr. Andrade is subject to disciplinary action because he willfully violated a rule promulgated by the CBA by failing to participate in a peer review program within the required time frame. Mr. Andrade failed to have a peer review report accepted by a Board-recognized Accusation No. AC-2015-100 contains the following peer review provider within 18 months of completing allegations: the attest engagement. Mr. Andrade is subject to disciplinary action because Mr. Andrade is subject to disciplinary action because he engaged in the practice of public accountancy he willfully violated a rule promulgated by the CBA by CO N TI N UE D O N PAGE 15 14 U P D AT E SPRING/SUMMER 2016 ENFORCEMENT ACTIONS T H RO UGH A PRIL 24 , 2 016 failing to enroll his firm with a Board-recognized peer review program provider. VIOLATION(S) CHARGED Business and Professions Code, Division 3, Chapter 1, Mr. Andrade is subject to disciplinary action because 5050, 5051, and 5100 (g). California Code of he willfully violated a rule promulgated by the CBA by Regulations, Title 16, Division 1, 39, 40, 41, and 52. failing to respond to a CBA inquiry. HARNER, EDWARD LAI qualifications, functions, and duties of a certified public Newport Beach, CA accountant or a public accountant. On September 11, (CPA 94570) 2013, Mr. Harner was convicted on his plea of guilty CBA ACTIONS Revocation of CPA License, via default decision. of violating Penal Code Section 261.5(c). Mr. Harner is subject to disciplinary action in that he failed to report his September 11, 2013, felony Effective April 24, 2016 conviction. CAUSE FOR DISCIPLINE VIOLATION(S) CHARGED Accusation No. AC-2016-47 contains the following Business and Professions Code, Division 1.5, Chapter 2, allegations: 490; Division 3, Chapter 1, 5063 (a)(1)(A), Mr. Harner is subject to disciplinary action in that he and 5100 (a). was convicted of a crime substantially related to the KIES, DANIEL R. A.K.A. DANIEL ROY KIES Mr. Kies is subject to disciplinary action in that he was San Francisco, CA qualifications, functions, or duties of a licensee. (CPA 104152) On or about September 30, 2010, Mr. Kies was CBA ACTIONS convicted after a jury trial of violating Penal Code Revocation of CPA License, via decision. convicted of an offense substantially related to the (PC) section 273.5(a) (inflicting corporal injury upon a spouse), a felony. The jury also convicted Mr. Kies In the event Mr. Kies applies for a new license or of three misdemeanors: two violations of PC section petitions for reinstatement and the license is issued, 240 (assault), and one violation of PC section 243(e)(1) he shall reimburse the CBA $4,169.14 for its reasonable (battery on a spouse). costs of investigation and enforcement. Effective February 27, 2016 CAUSE FOR DISCIPLINE Accusation No. AC-2015-29 contains the following allegations: Mr. Kies is subject to disciplinary action in that he failed to report in writing to the CBA within 30 days following his conviction. Mr. Kies is subject to disciplinary action in that he failed to comply with a citation issued to him in 2011 for failing to respond to a CBA inquiry. CO N T I N UE D O N PAGE 16 15 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er ENFORCEMENT ACTIONS T H RO UGH A PRIL 24 , 2 016 Mr. Kies is subject to disciplinary action in that he failed to respond to an inquiry by the CBA and/or failed to provide true and accurate information in response to the CBA's request for information. VIOLATION(S) CHARGED Business and Professions Code, Division 1.5, Chapter 2, 490 (a); Division 3, Chapter 1, 5063 (a)(1)(A), (a)(1) (B) and 5100 (a) and (g). California Code of Regulations, Title 16, Division 1, 52 (a) and (d) and 95.4. MEDLEN JR., DANIEL LEE MEDLEN & ASSOCIATES, LLP Respondents are subject to disciplinary action in that La Mesa, CA Medlen & Associates, LLP, was not validly registered (CPA 96426; PAR 7362) from September 1, 2012, when its only licensed CBA ACTIONS Revocation of CPA License, via default decision. Effective April 24, 2016 CAUSE FOR DISCIPLINE Accusation No. AC-2015-37 contains the following allegations: partner's individual license expired and was not renewed until April 21, 2015. Respondents are subject to disciplinary action in that Medlen & Associates, LLP, did not qualify as a registered firm with the CBA from September 1, 2012, when its only licensed partner's individual license expired and was not renewed until April 21, 2015. Respondents are subject to disciplinary action in that Respondents are subject to disciplinary action in that Respondents failed to respond to the CBA's request for Respondents committed acts of gross negligence information regarding C.E.'s allegations and questions when they caused client C.E. to be assessed a penalty regarding their practice. by the United States Internal Revenue Service. Respondents are subject to disciplinary action in that during the period from September 1, 2012, to February 28, 2013, Respondents practiced public accountancy by holding themselves out to the public as a CPA and CPA firm, while their licenses were invalid. Respondents are subject to disciplinary action in that they misled the public in believing that their licenses were valid from September 1, 2012, to February 26, 2013. 16 VIOLATION(S) CHARGED Business and Professions Code, Division 3, Chapter 1, 5051, 5060, 5072, 5100 (c) and (g), and 5101. California Code of Regulations, Title 16, Division 1, 52. U P D AT E SPRING/SUMMER 2016 ENFORCEMENT ACTIONS T H RO UGH A PRIL 24 , 2 016 TAYLOR, LLOYD Mr. Taylor is subject to disciplinary action in that he San Francisco, CA engaged in conduct constituting dishonesty and (CPA 15170) fraud resulting in violations of applicable professional CBA ACTIONS standards that indicate a lack of competency in the practice of public accountancy or in the performance Revocation of CPA License, via default decision. of the bookkeeping operations described in Business Effective April 24, 2016 and Professions Code (BPC) section 5052. CAUSE FOR DISCIPLINE Accusation No. AC-2015-98 contains the following allegations: Mr. Taylor is subject to disciplinary action in that he was convicted of a crime substantially related to the qualifications, functions, and duties of a certified public accountant or a public accountant. On or about June 30, 2014, in the case entitled United States of America v. Lloyd Taylor, United States District Court, Mr. Taylor is subject to disciplinary action in that he willfully violated rules and regulations promulgated by the CBA under the authority granted under the BPC. Mr. Taylor is subject to disciplinary action in that he committed fiscal dishonesty. Mr. Taylor is subject to disciplinary action in that he knowingly prepared, publicized, or disseminated false, fraudulent, or materially misleading financial statements, reports, and information. Southern District of California, case number 13CR1390, Mr. Taylor is subject to disciplinary action in that he a jury found Mr. Taylor guilty of multiple crimes. Those engaged in conduct constituting embezzlement, theft, crimes were substantially related to the qualifications, misappropriation of funds or property, or obtained functions, and duties of a certified public accountant, money, property, or other valuable consideration by including Title 18, United States Code, section 1542 fraudulent means or false pretenses. (False Statement on United States Passport Mr. Taylor is subject to disciplinary action in that he Application-three counts); Title 26, United States failed to report his convictions to the CBA. Code, sections 7212(a) (Corrupt Endeavor to Obstruct and Impede the Due Administration of the Internal VIOLATION(S) CHARGED Revenue Laws-one count), 7201 (Tax Evasion-two Business and Professions Code, Division 3, Chapter 1, counts); Title 18, United States Code, sections 1014 5063, 5100 (a), (c), (g), (i), (j), and (k). (False Statements to a Federally Insured Financial Institution-seven counts), and 1028A (Aggravated Identity Theft-six counts). 17 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er ENFORCEMENT ACTIONS T H RO UGH A PRIL 24 , 2 016 TOMLINSON, BRUCE WILLIAM an accountant before the SEC based on a SEC civil Los Altos, CA judgment. The complaint SEC Civil Case alleged that (CPA 50589) Mr. Tomlinson engaged in insider trading by tipping a friend and former business associate to material CBA ACTIONS nonpublic information in advance of an announcement Revocation of CPA License, via default decision. regarding the approval of certain pharmaceuticals. Effective February 27, 2016 Mr. Tomlinson is subject to disciplinary action in that CAUSE FOR DISCIPLINE suspended. Accusation No. AC-2016-20 contains the following Mr. Tomlinson is subject to disciplinary action in that he allegations: failed to report the SEC discipline to the CBA in writing Mr. Tomlinson is subject to disciplinary action in that within 30 days. he was disciplined in June 2013 by the United States Securities and Exchange Commission (SEC). The SEC suspended Mr. Tomlinson's right to practice as his right to practice before a governmental body was VIOLATION(S) CHARGED Business and Professions Code, Division 3, Chapter 1, 5063; 5100 (g), (h) and (l). ENFORCEMENT ACTIONS OTHER ENFORCEMENT ACTIONS THROUGH APRIL 24 , 2016 BOITANO, STEVEN F. final and are in addition to the CE hours required for San Jose, CA relicensing. (CPA 49589) Mr. Boitano shall complete a CBA-approved Regulatory CBA ACTIONS Review course. The hours shall be completed within 12 Revocation stayed with three years' probation, via stipulated settlement. Mr. Boitano's certified public accountant certificate No. CPA 49589 is suspended for 90 days. Mr. Boitano shall reimburse the CBA $10,170.76 for its investigation and prosecution costs. The payment shall be made within 30 days of the date the CBA's decision months of the date the CBA's decision is final and are in addition to the CE hours required for relicensing. Mr. Boitano shall comply with procedures provided by the CBA regarding notification to, and management of, clients. Mr. Boitano shall maintain an active license status. Other standard terms of probation. is final. Effective February 27, 2016 Mr. Boitano shall complete four hours of continuing CAUSE FOR DISCIPLINE education (CE) in ethics. The hours shall be completed within 12 months of the date the CBA's decision is 18 First Amended Accusation No. AC-2014-57 contains the following allegations: CO N T I N UE D O N PAGE 19 U P D AT E SPRING/SUMMER 2016 OTHER ENFORCEMENT ACTIONS T H RO U G H A P R I L 24 , 2 016 Mr. Boitano is subject to disciplinary action in that he fraudulent, or materially misleading financial statement, was convicted of crimes that are substantially related reports, or information. Mr. Boitano prepared and to the duties, function, or qualifications of a certified signed tax returns for calendar years' 2001, 2002, and public accountant. 2003, which contained false, fraudulent, or materially On or about August 9, 2013, Mr. Boitano plead guilty misleading information. The tax returns contained to three misdemeanor charges of violating 26 USC Section 7203 for failing to file a required tax return estimated tax payments that were not actually made. Mr. Boitano gave those tax returns to an IRS agent who for the calendar years 2005, 2006, and 2007, a was auditing him. misdemeanor. VIOLATION(S) CHARGED Mr. Boitano is subject to disciplinary action in that he Business and Professions Code, Division 1.5, Chapter 2, knowingly prepared, published, or disseminated false, 490; Division 3, Chapter 1, 5100 (a) and (j). CHISOLM, KERI MARIE When requested, Ms. Chisolm shall submit to biological Costa Mesa, CA fluid testing. (CPA 118994) Other standard terms of probation. CBA ACTIONS Effective February 27, 2016 In accordance with the CBA's 2013 Order, Ms. Chisolm's CAUSE FOR DISCIPLINE license is revoked, via stipulated settlement. However, the revocation previously stayed pursuant to the CBA's 2013 Order shall remain stayed and Ms. Chisolm shall Petition to Revoke Probation No. D1-2013-9 contains the following allegations: remain on probation for an additional year, until Ms. Chisolm's probation is subject to revocation April 28, 2019, with the following terms and conditions, because she failed to comply with her probation which shall supersede those in the CBA's 2013 order: condition number 12 (biological fluid testing) by Ms. Chisolm shall successfully complete a rehabilitation program for chemical dependence approved by the CBA and shall have reports submitted by the program. In addition, Ms. Chisolm must attend support groups as directed by the CBA. Ms. Chisolm shall completely abstain from the personal use of all psychotropic drugs, including alcohol, in any form except when lawfully prescribed. failing to cooperate with the CBA and its designee, Pharmatech, by failing to login, without excuse, into the testing system to indicate her availability for random biological fluid testing on 47 days from October 2013 through September 2015. Ms. Chisolm's probation is subject to revocation because her quarterly report, due April 10, 2015, was not received until April 18, 2015, and the report due January 10, 2015, was not received until January 12, 2015. 19 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er OTHER ENFORCEMENT ACTIONS T H RO U G H A P R I L 24 , 2 016 CHOI, CHRIS Mr. Choi shall maintain an active license status. San Jose, CA Mr. Choi shall comply with procedures provided by the (CPA 84515) CBA regarding notification to, and management of, CBA ACTIONS clients. Revocation stayed with three years' probation, via Other standard terms of probation. stipulated settlement. Effective February 27, 2016 Mr. Choi's certified public accountant certificate is CAUSE FOR DISCIPLINE suspended for 30 days. Mr. Choi shall reimburse the CBA $1,500 for its investigation and prosecution costs. The payment shall be made in quarterly payments due with the quarterly written reports. The final payment is due one year before the probation is scheduled to terminate. Mr. Choi shall complete four hours of continuing education (CE) in ethics. The hours shall be completed during the 30-day time period when his license is suspended and are in addition to the CE hours required for relicensing. Mr. Choi shall not resume practice until the hours are completed, he provides proof to the CBA, and has been notified by the CBA that he may resume practice. Mr. Choi must complete the course no later than 180 days after the effective date of the decision and order. Mr. Choi shall complete a CBA-approved Regulatory Review course. The hours shall be completed during the 30-day time period when his license is suspended and are in addition to the CE hours required for relicensing. Mr. Choi shall not resume practice until the Accusation No. AC-2015-88 contains the following allegations: Mr. Choi is subject to disciplinary action in that on or about June 3, 2014, he was suspended from appearing or practicing before the Securities and Exchange Commission (SEC) as an accountant. The conduct underlying Mr. Choi's violations occurred between approximately 2009 and 2010, when he worked at Nvidia Corporation (Nvidia). The SEC complaint alleged that, during this time period, Mr. Choi obtained nonpublic information about Nvidia's financial results and relayed the information to his friend. The friend later provided the information to an analyst working for a trust company in return for payment. Mr. Choi breached a fiduciary duty or obligation arising from a similar relationship of trust and confidence by disclosing the nonpublic information to the individual. Mr. Choi failed to report in writing to the CBA within 30 days of his suspension to practice as a certified public accountant before the SEC. hours are completed, he provides proof to the CBA, VIOLATIONS(S) CHARGED and has been notified by the CBA that he may resume Business and Professions Code, Division 3, Chapter 1, practice. Mr. Choi must complete the course no later 5100 (h) and (l) and 5063. than 180 days after the effective date of the decision and order. 20 U P D AT E SPRING/SUMMER 2016 OTHER ENFORCEMENT ACTIONS T H RO U G H A P R I L 24 , 2 016 DELOITTE & TOUCHE LLP CAUSE FOR DISCIPLINE Los Angeles, CA First Amended Accusation No. AC-2014-66 contains (PAR 6515) the following allegations: CBA ACTIONS Deloitte & Touche LLP is subject to disciplinary action 30-day suspension stayed with 20 months probation, in that on or about October 22, 2013, the PCAOB via stipulated settlement. imposed sanctions against Deloitte & Touche LLP. Deloitte & Touche LLP shall comply with all requirements of the Public Company Accounting Oversight Board (PCAOB) Order and report such compliance in its quarterly written reports submitted to the CBA. Maintain an active license. Specifically, the PCAOB ordered, in pertinent part, that Deloitte & Touche LLP was censured. Additionally, the PCAOB imposed a civil money penalty in the amount of $2,000,000. The PCAOB entered an order and imposed sanctions on Deloitte & Touche LLP based on findings of violation including a finding that Deloitte & Touche LLP violated Within 15 days of the effective date of the order, PCAOB rules by permitting a former partner of Deloitte & Touche LLP shall disseminate the Stipulated Deloitte & Touche LLP, who was subject to a PCAOB Settlement and Disciplinary Order to all of its suspension order, to become an associated person professional personnel officed in California, and shall of Deloitte during his period of suspension. On three confirm such dissemination in writing to the CBA. occasions during the suspension year, the PCAOB Deloitte & Touche LLP shall pay an administrative found that the former partner responded to questions penalty in the amount of $300,000. Payment shall be from engagement team members seeking guidance on made to the CBA within 60 days of the effective date the interpretation of firmwide policies and procedures of the order. and the applicability of PCAOB audit standards Deloitte & Touche LLP shall reimburse the CBA a sum not to exceed $100,000 for its investigation and prosecution costs, including those costs associated with probation monitoring. The CBA will periodically present Deloitte & Touche LLP with a certified statement of costs to date, including additional costs incurred during probation, and Deloitte & Touche LLP shall pay those costs to the CBA within 30 days thereafter. If costs are billed after the completion of the probationary period, the obligation to pay the costs shall continue, but the probation shall not be extended thereby. Other standard terms of probation. Effective February 27, 2016 concerning subjects falling within the former partner's areas of expertise, including, for example, the use of specialists and journal-entry testing in performing audits of the financial statements of issuer clients. Specifically, during the suspension year the former partner provided advice in connection with Deloitte & Touch LLP's audits of the fiscal year-end 2009 financial statements of three issuers, each of which the former partner knew, at the time, was an issuer audit client of Deloitte & Touch LLP. The PCAOB found that the former partner performed services related to the audit of a public company located in California and performed by CPAs located in California. VIOLATION(S) CHARGED Business and Professions Code, Division 3, Chapter 1, 5100 (l). 21 C AL I FOR N I A B OAR D O F ACCOU N TA N CY Ne ws le tt er OTHER ENFORCEMENT ACTIONS T H RO U G H A P R I L 24 , 2 016 EBERT, CARAN LEE Effective February 27, 2016 Topanga, CA CAUSE FOR DISCIPLINE (CPA 69777) Accusation No. AC-2013-54 contains the following CBA ACTIONS allegations: Revocation stayed with three years' probation, via Ms. Ebert is subject to disciplinary action in that she stipulated settlement. was grossly negligent and committed repeated acts Ms. Ebert shall reimburse the CBA $10,000 for its of negligence in connection with the income tax investigation and prosecution costs. The payment preparation services that she performed for her clients, shall be made in 10 quarterly payments, due with the husband and wife, D.T. and K.T. quarterly written reports. Ms. Ebert is subject to disciplinary action on the Ms. Ebert shall complete four hours of continuing grounds of unprofessional conduct in that she education (CE) in ethics. The course hours shall be violated regulations promulgated by the CBA that completed within 12 months of the effective date of the require certified public accountants to comply with all decision and order and are in addition to the CE hours applicable professional standards. required for relicensing. Ms. Ebert is subject to disciplinary action on the Ms. Ebert shall complete and provide proper grounds of unprofessional conduct in that in responses documentation of 24 hours of professional education to both the CBA's inquiries and questions at the courses in the subject matter of taxation every year investigative hearing, she gave inconsistent, inaccurate, she is on probation. The courses shall be completed and conflicting information. by March 31 of each year, and are in addition to the CE VIOLATION(S) CHARGED requirement for relicensing. Ms. Ebert shall maintain an active license status. Business and Professions Code, Division 3, Chapter 1, 5100 (c) and (g). California Code of Regulations, Title Other standard terms of probation. 16, Division 1, 52 (d) and 58. HICKEY, JAMES EDMOND JR. CAUSE FOR DISCIPLINE Long Beach, CA Accusation No. AC-2016-5 contains the following (CPA 38579) allegations: CBA ACTIONS Mr. Hickey is subject to disciplinary action in that Surrender of CPA license, via stipulated settlement. he secured his license by fraud, deceit, knowing Mr. Hickey shall pay the CBA $5,551.35 for its investigation and enforcement costs prior to the issuance of a new or reinstated license. Effective April 24, 2016 misrepresentation of fact, or by knowingly omitting to stated a material fact. On or about August 30, 2013, Mr. Hickey signed under penalty of perjury and submitted a completed Certified Public Accountant/ Public Accountant License Renewal Application to the CO N TI N UE D O N PAGE 2 3 22 U P D AT E SPRING/SUMMER 2016 OTHER ENFORCEMENT ACTIONS T H RO U G H A P R I L 24 , 2 016 CBA. Mr. Hickey misrepresented that he had attained Mr. Hickey is subject to disciplinary action in that 82 hours of CE by completing the following courses: he willfully made false and misleading statements Rental Real Estate Deductions, Real Estate Accounting, regarding his continuing education. Family Tax Planning, Ethics for California CPA, and Fraud Auditing and Forensic Accounting, when, in fact, he did not complete any CE during the renewal period. VIOLATION(S) CHARGED Business and Professions Code, Division 1.5, Chapter 2, 498; Division 3, Chapter 1, 5100 (b) and (g). California Code of Regulations, Title 16, Division 1, 89. JASPER, CARL W. Other standard terms of probation. San Jose, CA Effective April 24, 2016 (CPA 49304) CBA ACTIONS Revocation stayed with three years' probation, via stipulated settlement. CAUSE FOR DISCIPLINE Accusation No. AC-2016-16 contains the following allegations: Mr. Jasper is subject to disciplinary action in that Mr. Jasper's certified public accountant certificate is he was disciplined by the Securities and Exchange suspended for 90 days. Commission (SEC) in 2011 following a civil judgment Mr. Jasper shall reimburse the CBA $4,323.61 for its that was entered against him by the United States costs of investigation and prosecution costs. The District Court in a matter entitled \"SEC v Jasper,\" payment shall be made within 30 days of the date the U.S. District Case No. 07-6122JC (N.D. Cal.) (SEC Civil CBA's decision becomes final. Case). Mr. Jasper shall complete four hours of continuing Mr. Jasper is subject to disciplinary action in that his education (CE) in ethics. The hours shall be right to practice before a governmental body was completed within 12 months of the date the CBA's suspended. decision becomes final, and are in addition to the CE Mr. Jasper is subject to disciplinary action in that he requirements for relicensing. willfully violated section 5063 by failing to report the Mr. Jasper shall complete a CBA-approved Regulatory SEC discipline to the CBA in writing within 30 days. Review course. The course shall be completed within VIOLATIONS(S) CHARGED 12 months of the date the CBA's decision becomes final, and are in addition to the CE requirements for relicensing. Business and Professions Code, Division 3, Chapter 1, 5063 and 5100 (g), (h), and (l). Mr. Jasper shall maintain an active license status. Mr. Jasper shall comply with the CBA's procedure for providing notice to clients rega