New York Society of CPAs to Reveal Ethics Violations to Authorities

The membership of the New York State Society of Certified Public Accountants has passed a bylaw amendment that requires its professional ethics committee (PEC) to share ethics violations with regulatory authorities.

Violations by members will now be brought to the attention of state and federal authorities giving the ethics process more bite to better serve the public interest. In some instances, the PEC will inform regulatory authorities about its investigations before a final determination is rendered on the alleged ethics violations.

The new bylaw, which is now in effect, requires communication of certain professional conduct matters of CPA members or partners or employees of a member's firm to authorities. The new amendment is significant as the NYSSCPA is the first State Society to put this extensive referral process into effect.

"This change has been made by the Society to more stringently enforce ethical violations by members and bring them to the attention of federal regulatory authorities and we trust it will better serve the public interest," said PEC Chair, Ian J. Benjamin. The bylaw also empowers the PEC to inform regulatory authorities of an investigation on any other occasion the PEC deems appropriate. It will enhance the ethics process to address ethical cases in a timely manner and make decisions with more meaningful consequences.

There are a number of scenarios that automatically result in disclosure by the PEC to regulatory authorities, including the New York State Education Department, which licenses CPAs in the state, including:

  • After a member fails to cooperate with the PEC;
  • After a member is granted a deferral of an investigation by the PEC;
  • After a complaint is referred to the Joint Trial Board (a jointly operated ethics enforcement program run by the NYSSCPA and AICPA);
  • After a settlement agreement is entered into between the member and the PEC;
  • After a letter of required corrective action has been accepted by a member; and
  • If an investigation results in automatic suspension or termination of membership.

The new bylaw also requires the PEC to turn over to the regulatory authorities all statements and other materials relating to the investigation, requested by the regulatory authorities.

"Ethics are the core of our profession and I am proud we are first State Society to take such a strong stand, NYSSCPA President Jeff Hoops said. "Our goal is to help assure the public that CPAs in New York have high ethical standards and those who don't will be referred to regulatory bodies that have the power to revoke their license to practice, if circumstances warrant that."

Press Release: The New York State Society of CPAs is located at 530 Fifth Avenue, New York, NY 10036. To learn more about the Society call 800-633-6320 or visit the Society's website at www.nysscpa.org.

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