Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

How to stay away from the most popular ways to get in trouble with the California Board of Accountancy.

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Don’t send one of these to CBA unnecessarily. Image courtesy of Adobe Stock.

These must be the preferred ways CPAs pick to get in trouble with the regulators because the board of accountancy says these are the three most common reasons they issue monetary penalties.

What are the three most popular ways to draw a fine from CBA?

  • Don’t get minimum of 20 hours each year of your license term or don’t get 12 of those hours in technical topics.
  • Ignore a formal inquiry from CBA.
  • Don’t submit that Peer Review Reporting Form with your license renewal.

For more detail, check out the following article, quoted with permission, from the California Board of Accountancy.  Since it is quoted verbatim, I won’t put quotes around the entire article.

 

IT’S EASY TO AVOID CBA CITATIONS

To help increase awareness of CBA requirements and prevent licensees from receiving a citation, below are the top three violations that led to a citation in the previous fiscal year. Citations are posted on the CBA website and may include an administrative fine of $100 to $5,000.

20/12 Violation: The top violation is the failure to complete a minimum of 20 hours of continuing education (CE) in each year of a licensee’s two-year license renewal period, with a minimum of 12 hours of the required 20 hours in technical subject areas. Many active-status licensees calculate the 20/12 requirement by calendar year, but the law requires the calculation be based on the two-year renewal reporting period.

The CBA provides a sample worksheet on its website to help licensees track their CE. To access the worksheet, visit http://www.cba.ca.gov and click the “Licensees” link, then select “CE Reporting Worksheet–for Renewal.”

Failure to Respond to CBA Inquiries: The second most common violation is a failure to respond to any inquiry from the CBA in a timely manner. Whenever a licensee is contacted by the CBA, or a CBA representative, the CBA’s Regulations require the licensee to respond within 30 days, and make all files, working papers, and other requested documents available to the CBA.

Failure to Submit a Complete/Accurate Peer Review Reporting Form: The third most common violation is the failure to submit a complete and accurate Peer Review Reporting Form (Form PR-1) when renewing a license. To successfully renew a license, this form must be completed and provided to the CBA before the expiration of that license.

To avoid these and other citations, be sure to review carefully all information provided by the CBA and visit http://www.cba.ca.gov regularly for the latest news and updates.

Reprinted with permission from the California Board of Accountancy, UPDATE Issue #85 – www.cba.ca.gov.

 

In other words….

So, if you want to avoid the CBA’s 3 Top Penalties list, here are some tips on how to avoid sending them a check.

Make sure you get 20 hours of CPE and 12 of those are in technical areas during each of the years of your license term. The problem is when CPAs bunch their hours up into one year. As a peer reviewer for a few years, I think I’ve seen the problem. Sometimes the calendar gets away from someone and a huge portion of the hours are in the last month or two of the license term, as in perhaps 50 or 60 or 70 hours are in a six or eight week timeframe. The problem? Missing a massive amount of technical stuff in the preceding 22 months.

If you got a letter from the IRS, would you put it in a pile and then forget about it? Not likely. Apparently some CPAs, actually make that a lot of CPAs, throw away formal inquiries from CBA. Don’t do that. Talk to them. If there is an issue, deal with it.  I am confident neither the IRS nor CBA will forget about the letter they sent you.

That PR-1 form needs to be returned every time you renew your license. Only takes a couple of minutes to complete. Just get it done.

 

CBA social media outreach

If you are licensed in California and you are not paying close attention to the CBA, you might want to tune in. I have noticed over the years that CBA tries really hard to get news out to CPAs and consumers about regulatory matters.

You could check them out at:

Written by Jim Ulvog

February 16, 2018, 5:00 am at 5:00 am

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