Pennsylvania State Board of Accountancy Ethics Committee
Thomas J Baumgartner, Robert J DePasquale. Pennsylvania CPA Journal. Philadelphia: Winter
2005.Vol.75, Iss. 4; pg. 16, 1 pgs
Abstract (Document Summary)
The Pennsylvania State Board of Accountancy, by statute, regulates the
licensing requirements for CPAs in the state, which includes disciplinary
action. The PICPA's Ethics Committee investigates ethics complaints
brought against members, among other responsibilities. Complainants,
however, often confuse the role of these two different and distinct entities.
This article provides an overview of the roles and responsibilities for each of
these groups. Complaints brought against PICPA members are referred to
the Institutes Ethics Committee. Normally, the case is assigned to an
individual committee member, who investigates the complaint and reports
back to the committee. The complaint review procedure follows the Joint
Ethics Enforcement Program of the American Institute of Certified Public
Accountants. Section 3 of the Pennsylvania CPA Statute lists the general
powers of the State Board. The statute also gives the Board authority to
assess penalties on CPAs who are in violation of the statute.
Tie Pennsylvania State Board of Accountancy, by statute, regulates the licensing requirements for CPAs in
the state, which includes disciplinary action. The PICPA's Ethics Committee investigates ethics complaints
brought against members, among other responsibilities. Complainants, however, often confuse the role of
these two different and distinct entities. Some even mistakenly believe one group is part of, or reports to, the
other. This article provides an overview of the roles and responsibilities for each of these groups.
PICPA Ethics Committee
Complaints brought against PICPA members are referred to the Institutes Ethics Committee. Normally, the
case is assigned to an individual committee member, who investigates the complaint and reports back to the
committee. The complaint review procedure follows the Joint Ethics Enforcement Program of the American
Institute of Certified Public Accountants, which will be discussed in more detail in a future article. The
number of complaints received is sporadic, but usually falls between 10 and 20 per year. The type and
nature of the complaints also vary, with the largest number involving workpaper retention issues, alleged
technical standards violations, independence issues, or complaints received by disgruntled members of the
public.
If a violation is deemed to have occurred, the Ethics Committee determines which punitive action is
appropriate for the circumstances. Most common is the letter of "required corrective action," which requires
the recipient to immediately comply with professional standards, and might include specified continuing
professional education, follow-up review of subsequent work product, and other actions that may be
necessary. In more severe cases, admonishment, suspension, or expulsion from PICPA can occur.
All of these sanctions, however, relate only to the status of membership in the Institute. The committee has
no power to directly affect a CPAs license or certificate.
State Board
Section 3 of the Pennsylvania CPA Statute lists the general powers of the State Board, which includes the
ability to "promulgate and amend rules of professional conduct appropriate to establish and maintain a high
standard of integrity, objectivity, and dignity..."1
The statute also gives the Board authority to assess penalties on CPAs who are in violation of the statute.
Powers include the ability to revoke, suspend, limit, or otherwise restrict the certificate or license; censure or
publicly reprimand; require completion of CPE courses; require more frequent peer review; and assess fines
or penalties.
Other provisions of the statute allow for more severe penalties, including imprisonment.
Relationship
There is no structural relationship between the State Board and the PICPA Ethics Committee. Membership
in the Institute is automatically suspended, however, if a member s license is suspended or revoked by the
State Board. Likewise, the more serious actions of the PICPA against a member, which would result in
suspension or expulsion, become public record, as publication is mandatory.
WIENE SANDYAWATI – F0692
1 from 2
Investigations by the Ethics Committee are only initiated against members of the PICPA. Thus, the PICPA
cannot be involved in investigations of a CPA who is not a member of the Institute. That authority rests with
the State Board.
In recent years, as the integrity and objectivity of the profession has been questioned, the ability to selfregulate has been challenged. Every CPA should make it his or her obligation to preserve the disciplinary
process that propelled CPAs to the height of professional respect we have enjoyed. The State Board can be
reached at (717) 783-1404 or www.st-accountancy@state.pa.us. Information on the PICPA Code of Ethics,
and instructions on how to file a complaint, can be found in the Member Resources section of www.picpa.org
or by calling (888)272-2001.
Author Affiliation
Thomas J. Baumgartner, CPA, is a partner with Campbell, Rappold & Yurasits LLP. he is a member of
PICPAs Ethics Committee. he can be reached at tbaumgartner@crycpas. com.
Robert J. DePasquale, CPA, is a professor of accounting at Saint Vincent College. he is a member of the
PICPA Ethics Committee and Pennsylvania CPA Journal Editorial Board. he can be reached at
rob.depasquale@email. stvincent. edu.
WIENE SANDYAWATI – F0692
2 from 2