Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Posts Tagged ‘quality control

More disciplinary actions from California Board of Accountancy

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Image courtesy of Adobe Stock.

The Update #87 newsletter from California Board of Accountancy for Summer/Fall 2018 lists 38 disciplinary actions, by my count.

You can read my previous posts on CBA actions by clicking on this tag.

Here is my tally of license revocations, surrendered licenses, and revocations with stay (there are no suspensions or stayed suspensions this time around):

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Written by Jim Ulvog

November 30, 2018, 7:52 am at 7:52 am

Summary of disciplinary actions from California Board of Accountancy, Winter 2018

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What you will be doing if you ignore professional standards and then get caught messing up your audits and reviews, although the amount won’t be quite as large. Image courtesy of Adobe Stock.

The new Update newsletter from the California Board of Accountancy goes back to providing details on disciplinary actions. The Winter 2018 edition (#86) takes 20 pages to describe the 24 actions. The previous Update provided far less detail, which generated lots of feedback to the board, so the newsletter will again give the ugly details for the causes for discipline.

Update 11/30/18:  Thanks to CBA for listing the messy details on what CPAs are doing to earn their consequences.

Three things jump out at me from the current list of discipline.

First, every action comes with a substantial financial penalty in the form of reimbursing the CBA for their investigative costs.

Second, just about every CPA that got in trouble for audit or review problems was given a ban from performing attestation work until some time in the future when the firm requests and receives permission from CBA to again perform such work.

Third, several CPAs received a suspension from their CPA practice. This means the individual may not perform any actions which would otherwise require a license. I think that means the firm halts all their attestation work and unless also holding an enrolled agent credential ceases their tax compliance work.

Here is my summary of the causes of discipline for the license surrenders and the stayed revocations:

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Written by Jim Ulvog

August 6, 2018, 6:41 am at 6:41 am

New CPE requirement in California for CPAs who only perform preparation engagements

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Image courtesy of dollarphotoclub before merger with Adobe Stock.

Big news from CBA if the highest level of service you provide clients is a preparation engagement.

First, if you don’t perform compilations, reviews, audits, or other services covered by peer review, you don’t need to get a peer review.

Second, there is a specific CPE requirement:  4 hours in fraud education and 8 hours in prep or A&A.

The following article from the California Board of Accountancy, quoted with permission, provides more detailed explanation.  Since it is quoted verbatim, I won’t put quotes around the entire article.



CPAs who perform preparation engagements as their highest level of service are subject to a new continuing education (CE) requirement.

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Written by Jim Ulvog

February 19, 2018, 7:57 am at 7:57 am

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.



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.

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Written by Jim Ulvog

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

Highlights of common deficiencies in compilation and review engagements

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Image courtesy of Adobe Stock.

There is a six page listing of common deficiencies identified during peer reviews of complexion and review engagements described in the AICPA’s new risk alert Developments in Preparation, compilation, and Review Engagements – 2017/2018.

Here are a few paraphrased highlights of the deficiencies. I will list items that I perceive are more serious or more pervasive.

You might consider reading through the full list and mentally comparing it to how you perform review and compilation engagements to see if there’s something you are missing.

Here are some of the highlights:

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Written by Jim Ulvog

January 10, 2018, 9:26 am at 9:26 am

Free resource you can copy and paste to develop a Quality Control document for a small CPA firm.

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Cover of free resources from AICPA, used under fair use.

Did you know the AICPA has provided a tool you may use as a starting template to develop a Quality Control document?

If you perform compilations, reviews, or audits, you are required to have a written QC document. Even if you aren’t going through a system review. Even if you only do comps.

If you perform audits and will have to go through a system review, keep in mind you are obligated to have quality control program in place before the system review starts, even before the peer review year begins. That means you really really need to have a QC document in place. (Yes, I’m talking to you, my fellow sole practitioners.)

The AICPA’s template can give you an easy starting point, in case you want to step up your policy.

There are two documents, one tailored for a sole practitioner and the other for small firms. Here are links to the documents:

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Written by Jim Ulvog

July 13, 2017, 7:08 am at 7:08 am

More good stuff for CPAs: fees increasing and level of change increasing

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Image courtesy of

Image courtesy of

Two articles for your consideration:

  • We need to figure out how to ‘surf’ the massive waves of changes surrounding us.
  • Some CPAs are able to post fee increases. From my perception, that is a big change after seven years of economic hangover from the Great Recession.

3/24 – Tom Hood on LinkedIn – Why Accountants Must Learn How to Ride These Big Waves of Change – There are massive waves of change on the horizon. Risks of getting drowned are high for accountants and auditors.

We need to understand what those two comments mean and how to cope with the implications. Tom Hood’s article points toward those waves that are soon to crash down on our heads.

It’s a VUCA world

Major changes we are in can be summarized by that phrase: Read the rest of this entry »

Written by Jim Ulvog

March 28, 2016, 9:28 am at 9:28 am