Disciplinary Actions by State Boards of Accountancy 2008–2014: Causes and Outcomes

Abstract

ABSTRACT: This study examined the 775 disciplinary actions taken against individual CPAs by the boards of accountancy in the four states with the largest number of CPAs between 2008 and 2014. It was determined that monetary penalties were imposed in 68 percent of individual CPA disciplinary cases, with a median penalty of less than $5,000. Non-monetary sanctions were imposed in nearly all the cases. The most severe penalty—permanent revocation or surrender of the professional license—was less likely in actions involving attest issues than for most other causes, but was invoked in a large percent of disciplinary actions based on felonies and misdemeanors including “social” crimes such as DUI. Disciplinary actions against CPA firms in the same states during the same time period were analyzed, and it was determined that only 13 of those cases were separable from the actions against individual CPAs, suggesting that firms are not disciplined in lieu of taking action against individuals. Questions are raised ab...